Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Deal That Makes No Sense

stratechery.com

Post reply on HN
Print view View original

21–30 of 165 posts

Re: The Deal That Makes No Sense

#21

Post by shadowmint »

I don't agree with all the things in this article, but there certainly rings a bell of truth in there somewhere.

A 5.44 billion EURO transaction to acquire a company that is already in a strategic partnership with you and working exclusively with your platform doesn't make sense.

My vote also goes for Nokia being financially in trouble, and M$ have their hand forced by the fear of a collapse in Nokia would gut the distribution channels for all the flagship windows phone models.

Worse, what if word got out and someone else bought them?

...wait, no, that would mean Microsoft would have some special insider knowledge of Nokia's finances that no one else was party to. Surely not.

Re: The Deal That Makes No Sense

#22

Post by tankenmate »

hannibal5 wrote: post #12
beloch wrote: post #5

The notion that Nokia was about to jump-ship or simply go under is certainly plausible. Another possibility is that MS wanted to start using Nokia's resources for their other hardware projects and it was going to be awkward slicing off teams from Nokia and having them start working under a MS department. MS might not be selling as much hardware as Apple, but their XBox line is the current king of consoles. With a new…

I think Microsoft sees Smartphones as strategic must have for long term. MS saw that Nokia is the only player in the Windows market and Samsung is never going to be big on MS. They just bought the hardware and are making Windows phones into closed platform like iPhone is. I don't think that Samsung and others are going to continue making windows phones after MS bought Nokia.

The biggest reason that phones are a strategic "must have" is the massive drop in desktop sales.

Re: The Deal That Makes No Sense

#23

Post by harrytuttle »

shangaslammi wrote: post #20
polemic wrote: post #11

> "...I think Microsoft ought to abandon Windows Phone. The war is over, and iOS and Android won." That's remarkably short-sighted. The first iPhone was released only 6 years ago, Android 5 years ago. You really think that Microsoft - a company with nearly infinite runway, an enormous R&D investment and serious history - is going to down tools after a few years of frustration? Not likely. The prize is too big and con…

Yes, but the effect of ecosystem lock-down is huge compared to 5-6 years ago. It's not about who makes the best phones or phone-OS anymore. People are invested in their respective app ecosystems and all their photos, contacts, documents etc. are in Apple's or Google's cloud. I'm not saying that Microsoft doesn't have a chance at all but I think the odds are against Windows phones ever reaching a significant market sh…

I don't agree. Most of the general users I know forget their email password every time they fuck up their phone and just buy all the apps again.

This is the norm. The only thing people give a shit about is their data (and that is usually when it's way to late and they're about to lose it), not the apps.

Re: The Deal That Makes No Sense

#24

Post by 7952 »

polemic wrote: post #11

> "...I think Microsoft ought to abandon Windows Phone. The war is over, and iOS and Android won." That's remarkably short-sighted. The first iPhone was released only 6 years ago, Android 5 years ago. You really think that Microsoft - a company with nearly infinite runway, an enormous R&D investment and serious history - is going to down tools after a few years of frustration? Not likely. The prize is too big and con…

We are getting to a point where the power of the device is less of a distinguishing factor. Lots of people are satisfied with the hardware of the previous generation Iphone or lower spec'd Android Phones. If hardware prices continue to drop the feature phone market (which Nokia dominates) could easily turn into a low end smart phone market. The Windows Phone OS could actually be a good choice for this. This is also useful for Microsoft in the business market where there are a surprising number of feature phones (and aging Blackberry's).

Re: The Deal That Makes No Sense

#26

Post by andrewfong »

shadowmint wrote: post #21

I don't agree with all the things in this article, but there certainly rings a bell of truth in there somewhere. A 5.44 billion EURO transaction to acquire a company that is already in a strategic partnership with you and working exclusively with your platform doesn't make sense. My vote also goes for Nokia being financially in trouble, and M$ have their hand forced by the fear of a collapse in Nokia would gut the di…

> ...wait, no, that would mean Microsoft would have some special insider knowledge of Nokia's finances that no one else was party to. Surely not.

Not really an issue if the board approved going to Microsoft with the financial information first. Moreover, when negotiating the strategic partnership, Microsoft may have gotten a right of first negotiation, that would legally entitle it to first dibs on the acquisition and certain "insider knowledge" anyway. Ultimately, shareholders might still have to approve the transaction, but there's no insider trading issue with reaching out to potential acquirers on the downlow.

Re: The Deal That Makes No Sense

#27

Post by yulaow »

andrewfong wrote: post #26
shadowmint wrote: post #21

I don't agree with all the things in this article, but there certainly rings a bell of truth in there somewhere. A 5.44 billion EURO transaction to acquire a company that is already in a strategic partnership with you and working exclusively with your platform doesn't make sense. My vote also goes for Nokia being financially in trouble, and M$ have their hand forced by the fear of a collapse in Nokia would gut the di…

> ...wait, no, that would mean Microsoft would have some special insider knowledge of Nokia's finances that no one else was party to. Surely not. Not really an issue if the board approved going to Microsoft with the financial information first. Moreover, when negotiating the strategic partnership, Microsoft may have gotten a right of first negotiation, that would legally entitle it to first dibs on the acquisition an…

So, since the begin the Board was aiming to an acquisition by microsoft after nokia would be so in debt that the total cost would drop?

It seems like the board, since now, has made the interest of microsoft and not nokia.

Re: The Deal That Makes No Sense

#28

Post by Samuel_Michon »

7952 wrote: post #24
polemic wrote: post #11

> "...I think Microsoft ought to abandon Windows Phone. The war is over, and iOS and Android won." That's remarkably short-sighted. The first iPhone was released only 6 years ago, Android 5 years ago. You really think that Microsoft - a company with nearly infinite runway, an enormous R&D investment and serious history - is going to down tools after a few years of frustration? Not likely. The prize is too big and con…

We are getting to a point where the power of the device is less of a distinguishing factor. Lots of people are satisfied with the hardware of the previous generation Iphone or lower spec'd Android Phones. If hardware prices continue to drop the feature phone market (which Nokia dominates) could easily turn into a low end smart phone market. The Windows Phone OS could actually be a good choice for this. This is also u…

I don’t understand that reasoning. Why would a phone maker choose Windows Phone over Android?

– Android is cheaper than Windows Phone (many phone makers pay Microsoft to be able to use patents used in Android, but even then, Android is cheaper than Windows Phone)

– Android has lower system requirements than Windows Phone

– Android has a thriving app market, Windows Phone doesn’t

Windows Phone low-end phones will only be hit if Microsoft convinces network operators to push them. That could happen if network operators were to regain power over the consumer by doing so. For instance, it could mean that on those phones, the app market is managed by the network operator, customers would pay different rates for different kinds of data, and customers could only use a pre-installed web browser that serves the network operator’s ads.

Re: The Deal That Makes No Sense

#29

Post by bodyfour »

polemic wrote: post #11

> "...I think Microsoft ought to abandon Windows Phone. The war is over, and iOS and Android won." That's remarkably short-sighted. The first iPhone was released only 6 years ago, Android 5 years ago. You really think that Microsoft - a company with nearly infinite runway, an enormous R&D investment and serious history - is going to down tools after a few years of frustration? Not likely. The prize is too big and con…

Exactly. Plus it's a prize Microsoft probably feels it can't afford to lose.

If Android magically evaporated tomorrow Google would be just fine -- the core of their business (ad sales) doesn't fundamentally require that they control the mobile platform, although it certainly makes things easier.

Microsoft, on the other hand, had for decades been the platform company. They've historically tried to grow by pushing out from their desktop beachhead into other territory they think they can control the platform for (i.e. servers, game consoles)

Now suddenly they've found themselves behind in the highest-growth segments of the industry. In fact, just "behind" doesn't do their situation justice: they've had to spend billions just to claw themselves into a distant third place.

I expect that those billions will keep flowing. Microsoft is desperate to win this thing.

Re: The Deal That Makes No Sense

#30

Post by andrewfong »

shangaslammi wrote: post #20
polemic wrote: post #11

> "...I think Microsoft ought to abandon Windows Phone. The war is over, and iOS and Android won." That's remarkably short-sighted. The first iPhone was released only 6 years ago, Android 5 years ago. You really think that Microsoft - a company with nearly infinite runway, an enormous R&D investment and serious history - is going to down tools after a few years of frustration? Not likely. The prize is too big and con…

Yes, but the effect of ecosystem lock-down is huge compared to 5-6 years ago. It's not about who makes the best phones or phone-OS anymore. People are invested in their respective app ecosystems and all their photos, contacts, documents etc. are in Apple's or Google's cloud. I'm not saying that Microsoft doesn't have a chance at all but I think the odds are against Windows phones ever reaching a significant market sh…

Six years ago, most smartphone users were heavily invested in their Windows Mobile or Symbian app ecosystems, or in Blackberry's messaging ecosystem.

That said, to pull off an iPhone- and Android-style upset though, Microsoft would need a correspondingly huge difference in user experience though. The UI on Windows Phone is nifty, but it's not enough of a game changer for most people. It'd really have to be something like successful execution of wearable computing or the convergence described here: http://arstechnica.com/information-technology/2013/08/want-t...

Post reply on HN