Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Janet I. Tu.
Topic: stephen elop
You are viewing the most recent posts on this topic.
November 19, 2013 at 8:11 AM
Microsoft’s move to acquire Nokia’s phone business moved another step closer to completion as Nokia shareholders voted today to approve the deal.
John Stoll, Stockholm bureau chief of The Wall Street Journal, tweeted this morning:
Microsoft, you got your wish. Nokia shareholders green light $7B handset deal at meeting in Helsinki.
— John Stoll (@johndstoll) November 19, 2013
The vote came at a extraordinary meeting of shareholders held today in Helsinki.
September 3, 2013 at 12:59 AM
In case you missed it, here’s my first-day story on Microsoft’s $7 billion purchase of Nokia’s handset business, which includes parts of an interview I had with Microsoft CEO Steve Ballmer and Nokia Chairman and Interim CEO Risto Siilasmaa.
The story (which is running in the print edition of The Seattle Times today) didn’t have enough space to include more from the interview. So here are more tidbits.
On how long the deal has been in the works:
Ballmer said it began earlier this year when he called Siilasmaa about getting together in Barcelona during the Mobile World Congress in February. Ballmer wanted to discuss “ways in which we might improve our partnership,” he said.
During the meeting, Siilasmaa requested a complete examination all the different forms the partnership could take, as well as alternatives.
“I was probably thinking acquisition at the time,” Ballmer said.
On what Microsoft would gain by owning Nokia’s handset business directly, rather than just partnering with Nokia:
“We’ve been working very well together,” Ballmer said. “But at the end of the day, we’re two companies that need to protect relative value for their shareholders.”
With Microsoft purchasing Nokia’s phone business outright, “we remove any boundaries in agility,” he said.
He gave the example of the Nokia Lumia 1020 Windows Phone. “We had to each be very careful” because each company had other partners that it had to keep in mind.
Plus, “Nokia Lumia Windows Phone 1020 is a mouthful,” he said, laughing. “We can probably do better as a company.”
When asked what name might be used instead, he said, again laughing: “Something like Microsoft Windows Phone” might sound good.
Ballmer said Microsoft has bought the rights to the Lumia and Asha names. (Asha is the name of Nokia’s smartphones aimed at emerging markets.)
He said having one company making decisions on everything from innovations to marketing would make things more efficient, with higher returns.
Microsoft posted a slideshow presentation with more of the company’s thinking on the strategic benefits of the acquisition.
In one slide, Microsoft says Windows Phone’s royalty gross margins, under the current partnership, is less than $10 per unit. In addition, Microsoft pays Nokia to support the platform and invests in the marketing of its Windows Phone. If Nokia’s phone business became part of Microsoft, the smart device gross margin would be more than $40 per unit, according to Microsoft. And the marketing effort could be more focused.
September 2, 2013 at 8:42 PM
Microsoft is buying Nokia’s handset business as part of a $7.2 billion deal, the two companies announced today.
Microsoft is paying about $5 billion (EUR 3.79 billion) for Nokia’s Devices & Services Business. In addition, it is paying about $2.18 billion (EUR 1.65 billion) to license Nokia’s patents and to license and use Nokia’s mapping services.
The businesses that Microsoft is getting from Nokia brought in about $19.7 billion (EUR 14.9 billion) revenue in 2012, about half of Nokia’s sales that year.
Nokia retains other substantial parts of its business including networking infrastructure and services, technology development and licensing, and mapping and location services. Its patent portfolio remains within Nokia, which is granting Microsoft a 10-year non-exclusive license.
Nokia CEO Stephen Elop is stepping down from that position, and becoming executive vice president of Nokia’s Devices & Services division, leading its transition into Microsoft.
Once the transition is finalized, Elop becomes an executive vice president at Microsoft, heading a devices division that will include Windows Phone, as well as Xbox and Surface. Julie Larson-Green, current executive vice president in charge of the Devices & Studios division at Microsoft, will report to Elop.
(Elop’s name has come up fairly frequently as a possible successor to Microsoft CEO Steve Ballmer, who announced last month that he would be retiring once his successor has been chosen within 12 months.)
In total, Microsoft is getting Nokia’s mobile, smartphone and smart devices units; its design team; its production facilities; and its sales, marketing and support operations, according to Nokia.
Most of Nokia’s employees will remain where they are. After the deal closes, the roughly 32,000 employees in Nokia’s Devices & Services division — slightly more than half of them working in manufacturing and assembly in Nokia’s production facilities around the world — will still work in those facilities, but will work for Microsoft. About 4,700 of those employees work in Finland in research and development, engineering, design, and operations and will remain there.
“Bringing these great teams together will accelerate Microsoft’s share and profits in phones, and strengthen the overall opportunities for both Microsoft and our partners across our entire family of devices and services,” Microsoft CEO Steve Ballmer said in a news release. “In addition to their innovation and strength in phones at all price points, Nokia brings proven capability and talent in critical areas such as hardware design and engineering, supply chain and manufacturing management, and hardware sales, marketing and distribution.”
Nokia has made Microsoft’s Windows Phone its primary smartphone operating system since 2011 and its Lumia line of Windows Phone has been credited with giving Microsoft a tiny gain in market share over the past several months even as the OS in general struggles for a foothold in the marketplace. (Windows Phone has about a 3.3 percent worldwide market share.) But Nokia has been floundering and though it’s narrowed its losses lately, it still posted a $151 million loss last quarter.
Nokia said it expects to gain about about $4.2 billion (EUR 3.2 billion) on the sale.
The Finnish company retains the Nokia brand and under a 10-year agreement, Microsoft has said it would use the Nokia brand on certain mobile phones based on its Series 30 and Series 40 operating systems.
However, Nokia is restricted from using its own name on its own mobile devices until Dec. 31, 2015.
Microsoft is using its overseas cash reserves to fund the cash purchase, which is expected to close in the first quarter of 2014, subject to approval by Nokia’s shareholders and regulatory approval, according to a news release. Microsoft had reported having about $77 billion in cash reserves in a financial document filed with the U.S. Securities and Exchange Commission.
Such an acquisition “has been on everyone’s minds on and off,” Al Hilwa, an analyst with research firm IDC, said in an email. “It is good for both companies to see it happen. Nokia has a highly evolved device design and manufacturing process which will benefit Microsoft greatly. This is simply the fastest path in front of Microsoft to achieve something like Apple’s vision on devices. The key to progress in this space does not change, namely will Microsoft be able to create critical mass with its platform.”