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Microsoft to acquire Nokia

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Re: Microsoft to acquire Nokia

#31

Post by kyro »

Shamanmuni wrote: post #29
kyro wrote: post #23

Great move by Microsoft. This is an acquisition that arguably puts Microsoft mobile capabilities above that of Google's, and closest to Apple's. They're getting industry veterans with great design talent. They're getting a Lumia product that has the best build quality of any non-Apple smart phone. They're acquiring proven channels to access global markets. Both Nokia and Microsoft have been floundering in the mobile…

But they were together already. This past time Nokia only developed Windows phones and Microsoft paid for the marketing of the Lumia. Nokia had Stephen Elop as CEO, for crying out loud. We already knew Nokia was a part of Microsoft. This is not a move, just a formality; the low price gives you another hint. If the partnership Microsoft-Nokia could have changed their positions in the mobile sector, it would have happe…

It's more than that. Microsoft is acquiring the Lumia brand. This gives them the ability to bundle both hardware and software to create one simple, cohesive experience. They will no longer be pushing the Nokia Lumia with Windows Phone 8, but The Microsoft Phone. And they can now brag about how they are the smartphone with the best camera. From a marketing perspective, this makes lots of sense.

Lots of that is speculation on what I hope Microsoft does with this, namely adopting Apple's marketing simplicity and control of the user experience.

Re: Microsoft to acquire Nokia

#32

Post by sjwright »

anomaly_ wrote: post #19

I found this statement interesting - "Microsoft will draw upon its overseas cash resources to fund the transaction." I've seen it mentioned quite a few times that tech companies end up with massive overseas cash reserves they can't repatriate for tax reasons. Anyone with better knowledge of finance/tax want to chime in with whether this makes the deal even more attractive for MS?

A summary of the tax arrangements used by some large American multinationals, including Microsoft, Google, Facebook, Apple, Oracle and Adobe:

http://en.wikipedia.org/wiki/Double_Irish_arrangement

As I understand it, these international profits remain in the tax-haven-resident Irish company, and cannot be repatriated to the US parent without incurring an undesirable taxation event.

It's highly likely that Finland-based Nokia is a fiscally efficient purchase for Microsoft. Both Finland and Ireland are EU countries, are in the Eurozone, and have a customs union.

(It would be interesting to compare this to Google's purchase of Motorola Mobility, which was an American company.)

Re: Microsoft to acquire Nokia

#33

Post by jwr »

Shamanmuni wrote: post #29
kyro wrote: post #23

Great move by Microsoft. This is an acquisition that arguably puts Microsoft mobile capabilities above that of Google's, and closest to Apple's. They're getting industry veterans with great design talent. They're getting a Lumia product that has the best build quality of any non-Apple smart phone. They're acquiring proven channels to access global markets. Both Nokia and Microsoft have been floundering in the mobile…

But they were together already. This past time Nokia only developed Windows phones and Microsoft paid for the marketing of the Lumia. Nokia had Stephen Elop as CEO, for crying out loud. We already knew Nokia was a part of Microsoft. This is not a move, just a formality; the low price gives you another hint. If the partnership Microsoft-Nokia could have changed their positions in the mobile sector, it would have happe…

Exactly. My first reaction to this news was "wait, didn't this already happen?", before I realized that it didn't quite happen, but the speculation at the time Elop joined Nokia was precisely about an acquisition.

Re: Microsoft to acquire Nokia

#34

Post by tanzam75 »

cpeterso wrote: post #26

The press release says Microsoft will acquire Nokia’s Devices & Services business and license Nokia’s patents and mapping services. So what happens to the rest of Nokia?

> So what happens to the rest of Nokia?

Nokia keeps the other two divisions.

Nokia is now primarily a telecoms infrastructure company, like Alcatel-Lucent. They're pretty closely matched. Alcatel-Lucent had €14.4 billion of revenues in 2012, while Nokia Siemens Networks took in €13.1 billion of revenues.

There's also the mapping division, but that's just 10% of the new Nokia's revenues. I'm surprised Microsoft did not buy it, as Google and Apple both own their own maps. In fact, I wonder if the mapping division wasn't what scuttled the previous attempts to reach a deal.

Re: Microsoft to acquire Nokia

#36

Post by gph »

cpeterso wrote: post #26

The press release says Microsoft will acquire Nokia’s Devices & Services business and license Nokia’s patents and mapping services. So what happens to the rest of Nokia?

"Its device business now gone, Nokia's plan is to focus on three core technologies: NSN (its network infrastructure) HERE (its maps and location-based services); and Advanced Technologies (a licensing and development arm)."[1]

It'll still exist. Most of the top executives are moving to Microsoft as part of the deal though.

I am curious if this deal required shareholder consent of any type. I'm sure the board had to approve. Still I don't know how I'd feel if I was holding onto a decent chunk of Nokia stock right now and I didn't get any say in selling out our core business.

[1]http://www.theverge.com/2013/9/2/4688530/microsoft-buys-noki...

Re: Microsoft to acquire Nokia

#37

Post by hpaavola »

cpeterso wrote: post #26

The press release says Microsoft will acquire Nokia’s Devices & Services business and license Nokia’s patents and mapping services. So what happens to the rest of Nokia?

Nokia bought Siemens part of Nokia Siemens Networks earlier this year. That will be their focus onwards. Ericsson did the same many years ago (when Nokia started to dominate the mobile phone business) and is now the biggest networking company.

Re: Microsoft to acquire Nokia

#38

Post by tanzam75 »

general_failure wrote: post #28

So, is there any Nokia left after all this?

> So, is there any Nokia left after all this?

Yes, it leaves Nokia Siemens Networks and HERE Maps.

Last quarter, NSN accounted for 49% of Nokia revenues, and 108% of operating profit. (Not a typo -- the phone division lost money.) HERE Maps is insignificant, but for some reason Nokia wanted to hang on to it.

So, Nokia now has a slightly increased operating profit, plus an extra €5.4 billion from Microsoft. According to the press release, when you subtract out the purchase price for the "S" half of NSN, Nokia has €7.8 billion in net cash. For a company that closed yesterday at a market cap of €11 billion.

Re: Microsoft to acquire Nokia

#39

Post by phyalow »

SeanLuke wrote: post #18
pyre wrote: post #15

Earlier quoted context omitted.

We've yet to see Google do anything interesting w/ Motorola though (unless I've missed something). The Nexus line are all currently built by LG, no? So sure they own Motorola, but they haven't (tightly) integrated it into their Android plans.

Moto X

> Interesting...

Re: Microsoft to acquire Nokia

#40

Post by tanzam75 »

Steko wrote: post #22

Speaking of handset makers that missed the revolution, I wonder who will pick up RIM as they circle the drain. Microsoft is probably the favorite right?

Now that Microsoft is buying Nokia, it seems unlikely that Microsoft will buy Blackberry. Unless it's a firesale for the patents.

Note: RIM changed its name to Blackberry Ltd, with a stock ticker of BBRY.

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