Speaking Engagements & Private Workshops - Get Dean Bubley to present or chair your event

Need an experienced, provocative & influential telecoms keynote speaker, moderator/chair or workshop facilitator?
To discuss Dean Bubley's appearance at a specific event, contact information AT disruptive-analysis DOT com

Tuesday, September 03, 2013

Quick thoughts on Microsoft + Nokia acquisition

So... I called that one very wrong indeed. I've consistently laughed at the notion that Microsoft would acquire Nokia, as it seemed such a strategically stupid thing for it to do (for Microsoft at least).

I suspect Steve Ballmer thought the same way as me - hence his decision to retire last week. I'm bet that the Board (& presumably Bill Gates) had some "robust" discussion about this.

[Note - technically MS has actually just bought the Devices & Services unit; Nokia remains as an independent company with a 148yr history]

Some quick thoughts (mostly ones that I think other analysts won't cover):

  • MS has decided against following Oracle down the trend towards "IT-isation of the network" by leaving NSN out of the deal. Wouldn't surprise me to see IBM or HP step up to the plate, though.
  • But on the other hand, it now has a ton of Oracle-powered (ie Java) devices in its portfolio as it's picked up Nokia's featurephone business as well as smartphones
  • On the other hand, this reduces any fears that the Windows Phone / Lumia line could suffer mid-term if Nokia's finances had worsened. MS will be able to put its full marketing/distribution muscle to use
  • This is mostly irrelevant to anything that Skype is/will be doing, although I'm sure plenty of people will insist that 2+2=5. (Sidenote: Skype is more about extending enterprise comms with Lync, as well as integration with X-Box, Office & Outlook)
  • So, the "big guys" for integrated consumer software/device/app ecosystems are now Apple, Google and Microsoft, with Samsung and maybe Sony playing in "everything but an OS". Will be interesting to see if Amazon or Huawei try to crash the party as well (via BlackBerry or HTC perhaps).
  • It's entirely unclear if this acquisition helps or hinders Microsoft in the tablet space. WinRT has been pretty pointless so far.
  • This isn't especially helpful from the perspective of WebRTC, as it further entrenches the Chrome vs. IE vs. Safari/iOS divide. That said, Nokia has been quite keen in the past as it tends to be fairly web-savvy. Wonder if we'll see Samsung get friendlier with Firefox or maybe acquire Opera?
  • Expect a whole new round of IPR lawsuits now that Nokia's patent portfolio has been detached from its devices business. Microsoft has got a licence, but has (wisely?) decided against fully entering that fray as a patent owner.
  • The line "will draw upon its overseas cash resources to fund the transaction" suggests that this is partly a tactical move to reduce taxation of repatriated profits
  • Qualcomm's role of silicon arms merchant (or indeed ARM merchant) to all the main handset families is underscored here.
  • Nokia's huge (and in some places still-loyal) footprint of featurephone users *might* be leveraged to give the flagging PC market a boost, if it can convince them to leapfrog low-end Android tablets and get proper computers instead
  • MS has licenced the Nokia brand & will use it to "extend its service offerings to a much wider group"... ie people who don't know/understand/see relevance in the Windows brand, especially non-PC owners.
  • The remaining bits of Nokia are actually quite interesting/cool when viewed as a "new company" - a reinvigorated NSN facing the shift to NFV/SDN, the HERE mapping unit and its R&D/patent unit. It's got rid of the stuffy old phone business and can now concentrate on the cloud, where all the action is going to be
  • This also means that "New Nokia" has a bunch of new prospective clients, notably Apple (which let's face it, could use some decent maps)
  • There will probably be some truly horrible attempts to combine Lumia + Xbox in a couple of years' time
  • This will have near-zero effect on Microsoft's enterprise business for the foreseeable future. I can't see corporate users switching en-masse to Windows Phone, especially in the era of BYOD

I'll try add to this as other things come to mind. But overall, this is much more positive for "New Nokia" than it is for Microsoft, in my opinion.

No comments: