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Nokia to get 'huge' payments from Microsoft

washingtonpost.com

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Re: Nokia to get 'huge' payments from Microsoft

#31

Post by cosmicray »

charleso wrote: post #19

How much in the minority am I for thinking this is a good plan for Nokia? Echoing my post in another thread, Apple received $150 million in financing from Microsoft back in 1997 in exchange for including IE on the Mac (among other partnership goodies). If you don't recall that period of computer history (when Apple almost went bust), you may want to watch this Steve Jobs Macworld 1997 presentation discussing their jo…

> Echoing my post in another thread, Apple received $150 million in financing from Microsoft back in 1997 in exchange for including IE on the Mac (among other partnership goodies).

Actually, based on my hazy recollection, someone at Apple had discovered an IP violation by MSFT (something to do with QuickTime code having leaked over to MSFT). Apple at that time was in pretty dire shape. Steve basically called up (Bill or Ballmer, not sure which) and said here's the deal..., after which it was decided that rather than protracted litigation, Apple would take a $150M investment from MSFT, and would issue a special class of stock, which could be convertible to regular stock at a later date. I do believe there was some kind of agreement to include MSIE, and/or that MSFT would make Office for the Mac a guaranteed product for a certain period of time.

From what I read, no one lost money on the deal. The cash investment helped Apple survive the rough patch, MSFT sold off their investment at a later date, Office moved on to be a solid product on the Mac, etc.

I do not believe that MSFT would have done any of this without a little persuasive arm twisting.

Re: Nokia to get 'huge' payments from Microsoft

#32

Post by sambeau »

Microsoft will be hoping to recoup losses by selling apps, services and advertising.

If xbox live proves to be a big hit on Nokia devices the strategy could work. Nokia will also need to sell hundreds of millions of devices and the Windows App Store will need to take off bigtime.

But it is a gamble: xboxes and Bing are loss-making at present.

Maybe they have something else up their sleeve?

Re: Nokia to get 'huge' payments from Microsoft

#33

Post by nextparadigms »

hnhg wrote: post #17
cma wrote: post #14

Earlier quoted context omitted.

Ballmer absolutely ridiculed Google for making Android free. A couple of short years later and Microsoft goes with a negative price.

I doubt MS will extend this deal if they are successful in the market whereas Google would find it hard charging for Android.

Google doesn't have to charge for Android. They will make $10 per user from mobile ads alone, according to a recent report.

Re: Nokia to get 'huge' payments from Microsoft

#34

Post by elithrar »

oikujhghjk wrote: post #30
blinkingled wrote: post #25

Earlier quoted context omitted.

>Nokia can differentiate just by being the company that produces beautiful devices running Windows Phone? You think that's their plan? You think Microsoft is naive enough to let it happen? If the short WP7 history is any clue - it's not going to be easy for Nokia to differentiate at all. >And to point "c" -- that there is a "glaring omission from Nokia and WP7 strategy -- dude, it was made public like 4 days ago. Way…

Everybody believes this is precisely Nokia and Microsofts stratergy. WP7 will be the only phone that you are sure will play nicely with microsoft email etc Business will follow the - never got fired for buying microsoft route Nokia is the only brand these same businessmen have heard of - they aren't going to take a risk on some 'foreign firm'. So Nokia becomes Microsoft's RIM.

> So Nokia becomes Microsoft's RIM.

This would have been a good point – and certainly so if this had happened even just a couple of years ago.

But it didn't, and business has begun to adopt the iPhone and even Android devices because of the large gap in the market, and because Apple & Google are driving devices that people actually want to use outside of business too.

Re: Nokia to get 'huge' payments from Microsoft

#35

Post by dangrossman »

sambeau wrote: post #32

Microsoft will be hoping to recoup losses by selling apps, services and advertising. If xbox live proves to be a big hit on Nokia devices the strategy could work. Nokia will also need to sell hundreds of millions of devices and the Windows App Store will need to take off bigtime. But it is a gamble: xboxes and Bing are loss-making at present. Maybe they have something else up their sleeve?

I thought the entertainment division (Xbox+) had been profitable for some years now.

Re: Nokia to get 'huge' payments from Microsoft

#36

Post by jarek »

elithrar wrote: post #34
oikujhghjk wrote: post #30

Earlier quoted context omitted.

Everybody believes this is precisely Nokia and Microsofts stratergy. WP7 will be the only phone that you are sure will play nicely with microsoft email etc Business will follow the - never got fired for buying microsoft route Nokia is the only brand these same businessmen have heard of - they aren't going to take a risk on some 'foreign firm'. So Nokia becomes Microsoft's RIM.

> So Nokia becomes Microsoft's RIM. This would have been a good point – and certainly so if this had happened even just a couple of years ago. But it didn't, and business has begun to adopt the iPhone and even Android devices because of the large gap in the market, and because Apple & Google are driving devices that people actually want to use outside of business too.

There are so, so many businesses in North America that have not adopted iOS or Android so far and are still using Blackberries. This deal probably gives Nokia its best shot at getting a share of this market -- not necessarily a great shot, but better than it would have had otherwise.

Re: Nokia to get 'huge' payments from Microsoft

#37

Post by thought_alarm »

Headline:

    Nokia CEO: Co. to get billions from Microsoft
Fine print:

    Nokia will be contributing its Ovi mapping service and
    will be paying Microsoft royalties for the use of its
    software, as other manufacturers do. It will save money
    by not continuing development of its own software. The
    net benefit is still in the billions, he said.
In other words, Nokia is saving billions by licensing WP7 and laying off most of its workforce.

So it's exactly as everyone first assumed. Nokia is not getting "huge payments from Microsoft". Nokia is merely licensing WP7.

Re: Nokia to get 'huge' payments from Microsoft

#38

Post by sambeau »

dangrossman wrote: post #35
sambeau wrote: post #32

Microsoft will be hoping to recoup losses by selling apps, services and advertising. If xbox live proves to be a big hit on Nokia devices the strategy could work. Nokia will also need to sell hundreds of millions of devices and the Windows App Store will need to take off bigtime. But it is a gamble: xboxes and Bing are loss-making at present. Maybe they have something else up their sleeve?

I thought the entertainment division (Xbox+) had been profitable for some years now.

Not according to a story that was on HN a few weeks back (unless I'm mis-remembering). I'll dig around and see if I can find it.

They certainly lose money on each xbox but its possible that they make it back on the sale of games.

Re: Nokia to get 'huge' payments from Microsoft

#39

Post by sambeau »

dangrossman wrote: post #35
sambeau wrote: post #32

Microsoft will be hoping to recoup losses by selling apps, services and advertising. If xbox live proves to be a big hit on Nokia devices the strategy could work. Nokia will also need to sell hundreds of millions of devices and the Windows App Store will need to take off bigtime. But it is a gamble: xboxes and Bing are loss-making at present. Maybe they have something else up their sleeve?

I thought the entertainment division (Xbox+) had been profitable for some years now.

Looks like I mis-remembered:

http://www.betanews.com/joewilcox/article/Microsoft-Q1-2011-...

Q1 2011 Income by Division

• Windows & Windows Live: $3.32 billion, up 124 percent from $1.5 billion a year earlier (20 percent growth when adding deferral).

• Server & Tools: $1.63 billion, up 32 percent from $1.24 billion a year earlier. Business: $3.39 billion, up 20 percent from $2.83 billion a year earlier.

• Online Services Business: Loss of $560 million, up 17 percent from $477 million loss a year earlier.

• Entertainment & Devices: $382 million, up 47 percent from $260 million a year earlier.

although, this comment by puts it in perspective:

http://news.ycombinator.com/item?id=1842290

"In 2009 it finally posted it's first profit - $165 million, though it's probably worth noting that as a percentage of the $6 billion it had lost to that point this is basically nothing."

Re: Nokia to get 'huge' payments from Microsoft

#40

Post by mcantelon »

jarek wrote: post #16
joe_the_user wrote: post #13

Earlier quoted context omitted.

Yes, Considering that the EU also recently paid Nokia to keep developing Symbian, my naive thought is the EU would be very interested in this. http://www.unwiredview.com/2010/11/02/explaining-symbeose-sy... But I would easily admit my naive ideas about could be wrong given the many things that happen under the radar these days... Edit: Elop denies being "the seventh largest Microsoft shareholder" despite being listed…

He is, at most, the ninth largest known individual shareholder. He can't get rid of said shares for regulatory reasons. Please see the discussion at http://news.ycombinator.com/item?id=2212555 .

Whether or not he can get rid of his shares in the short term, what is good for Microsoft is good for his net worth which, it would seem, creates a conflict of interest.
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