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Microsoft and Nokia deal has been in the works for some time

Nokia And Ballmer

The deal between Microsoft and Nokia hasn't simply come about in a matter of hours. According to the leaders of both companies, talks have been underway for some time, which included dozens of meetings. It's reported over on AllThingsD that Nokia's own board and committees alone had more than 50 meetings regarding the purchase. 

The then Nokia chairman, Risto Siilasmaa and Microsoft CEO Steve Ballmer spoke about the potential deal at a meeting back in February at Mobile World Congress in Barcelona. Already sporting a tight relationship which was formed back in 2011, talks eventually shifted to calculating whether or not a merge (or purchase) would make sense. 

Now Nokia CEO Risto Siilasmaa told AllThingsDigital, "We have worked very hard on both sides–and together in finding out the way to do a transaction." Microsoft CEO Steve Ballmer explains how both partners had multiple plans and aimed to reach a middle ground that suited the partnership.

Ballmer continued to explain, "We looked at many, many possibilities together and ultimately took this one with us buying all of Nokia’s phone business, becoming an innovation partner and customer of Here and licensing patents from Nokia." This makes more sense, providing Microsoft with the means to focus on creating first-party Windows Phones, while remaining a customer to Nokia for HERE services and more.

HERE Connected Driving

Microsoft will also retain the ability to further innovate on top of Nokia's HERE mapping system. The major part in this purchase is the continued push towards Microsoft becoming a devices and services company. CEO Steve Ballmer has been pushing for the company to move into a new age and this deal helps out by:

  • Accelerating share and profits in phones
  • Creating first rate Windows Phone experience for its users
  • Preventing Google and Apple from foreclosing app innovation, integration, distribution and economics
  • Preparing for the financial opportunity that will be fuelled by a growing smartphone market

What's next on the horizon for Nokia and Microsoft? That's yet to be seen.

Source: AllThingsD

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Reader comments

Microsoft and Nokia deal has been in the works for some time

143 Comments

I laughed when a friend of mine said that Microsoft should buy out BlackBerry and call the new phones "MicroBerry".

Do you actually know what the basic idea of a Trojan horse is? Joining a company and working with its board of directors in cementing a deal is not what it is.

Do you?
I think what AngryNil and Ammarmalik2011 means is:
Destroying the value of a (part of a) great company to sell it to his former (?) employer would be exactly that.

A Trojan horse outright tricks the other party. Elop wasn't in a costume, he had his years at Microsoft in plain view. The company straight-up approved Elop as a CEO. The board of directors have obviously supported his decisions, else he would have gotten the boot. Elop isn't tricking anyone, the company is fully aware of what is happening and even negotiated this very deal. Elop didn't drop a guise and let the Softies pour in to Nokia HQ.
 
You can accuse him of having his own motives, but that doesn't matter. That isn't a Trojan horse. People need to stop trying to distort this broken analogy, it just doesn't work.

The only people who call Elop a Trojan are Android fanboys who now will never get their hands on Nokia hardware.

And now you won't either lol you will have hard rigid surface phones instead of soft curved lumina phones...hope your happy about elop destroying a phone manufacturer 

Most likely we will have both. There are many people that have been hoping for a surface phone. Now that Nokia won't object to it, it might happen. In the meantime, they will continue making lumia phones.

If that's the case, why wouldn't you be calling Risto and the board Trojan's? From the statements above, the board and commitees had over 50 meetings with Microsoft to discuss a buyout or merger, but of course it was all Ballmer huh! People like you only mention facts you want to in order to paint a bad picture of a certain individual; in this case Stephen Elop simple bacause he worked for MS in the past. If you're going to convict, at least convict the entire Board at Nokia as it clearly states they've been working with MS concerning this matter for quite some time.

Quite. I would like to think the Board employed Elop to guide Nokia back to its former glory as a mobile phone empire. And at first it did look like that is exactly what he was going to do. Either he failed as Nokias CEO or was a trojan horse, or it was already a lost cause, take your pick.
I have a hard time believing in this trojan horse business, just saying that the analogy fits, if you will.
It by no means takes away the fact that the Board and previous Nokia chiefs might have made bad decisions. Ballmer on the other hand has played well in all this, codos to him.

Because if they stuck with Symbian and meego their company would be worth a lot more? They knew internally that their platform was working well and that they couldn't get the developer support. Microsoft might have issues with developer support but it is 100x better than what Symbian had.

ammarmalik2011 is a well known troll on this board. He contributed nothing except crude and ignorant comments about all things Microsoft & Nokia. So just ignore him.

ehmm because ITS NOT true...
please stop being ignorant like these people calling elop trojan horse, Elop can be CEO but he never had the last word in these kind of decisions, like partnership and now this adquisition.

The future of WP??????? This is the future of Nokia...... All the beatiful hardware, quality, design, innovation... No WP, its Nokia...

I'm not sure where you've been the last year but essentially right now Nokia Lumia is WP...and there's those two other phones. So yes the future of Nokia phones is the future of WP

Nokia = Windows Phone!
Now there's 30,000 new employees who most will continue to keep doing the same thing and the only change they are going to see is Microsoft on their paycheck.

Excellent stuff. Given the shambolic and diminishing showing of the other handset manufacturers I don't see losing OEMs a big deal on this.

I'm open to correction on here - but a halfbaked attempt at forcing HTC branding on the homepage or Samsung's slither of OEM software is nothing compared to the maps, music, AR, photography and other bits that Nokia have contributed. It's that kind of level of involvement that's required IMO.

Speaking as WP dev, Samsung and HTC are nowhere and they don't appear to care either. I am OK with this.

I have to agree w/ majjie... if the 'support' we've seen from HTC and Sammie is 'other companies giving more ideas', then really the only idea they've shared is how little they give a crap about the Windows Phone OS.

I agree with you 100%! Why is it not a big deal when manufacturers like LG and rumored HTC to abandon windows phone, yet when MS takes a step to keep themselves relevant its bad? These OEM's have clearly shown that they are devoted to Android. Samsung is working on their own phone OS, preparing for an exit away from Android if successful. Do we want MS to play the wait and see game or get a head of it??? In this forum, people are always saying MS is, "late to the party". Well they're being proactive here, yet the whiners are out.

When people say proactive they mean SOFTWARE not HARDWARE. They want wp to cover the little wholes in the os faster not buy Nokia outright!

nokia is dead you fool! its not anti android because it no longer exsist as we knew it...its microsoft now...not nokia..can you grasp this?

At least I got my Nokia 1020 before the downward Microsoft designers steps in. For all those needing upgrades the 1020 and the "1520" may be the last of great designs and quality. Get em while you can... Sincerely: An uncertain Microsoft/Nokia Admirer.

Actually MS's designers had been on a pretty good run recently when it came to design.  The Metro software interface is awesome and won many praises, including diehard Apple fans and ex-Apple employees like Woz, the look of Surface hardware is also surperb (failings of Surface is really the guts leading to poor performance and battery life etc, so nothing to do with how it looks).  Many people were dying for a Surface Phone based on the Zune HD as well.  Also Microsoft makes great and long lasting peripherals like keyboards and mice.  If anything with Nokia designers in house I'm hoping both company's creative energy would lead to even greater things.

Yeah, my thoughts exactly. As part of the purchase, the Nokia Devices team murges with the ones that did the Surface and becomes the Microsoft Devices Design Team bringing the best of both. ( VapourMG as well as Polycarponate Lumias?? -  Polycarbonate and VaoprMG Surfaces??)

Read the presentation released by Microsoft... Phone design and R&D stays in Finland. I'm sure Microsoft will influence design, but I don't believe they'll hurt it.

Elop is still in charge of Nokia devices. He is not a CEO of Nokia, but Nokia doesn't have devices now. Nokia will be doing other things now. Branding will remain though.

Surface phone= 5.2 fhd+ screen, Intel chip 3 gigs of ram 3.2 GHz 64 or 128 gigs of internal memory with expansion 40 mp pureview camera on back with 3.0 mp camera and micro Kinect up front. Sorry it was a dream had to say it.

I like all these. Hope both company can contribute to a great phone in the near future, and computer too.

and a fan to keep it cool and a wire from the phone to a large battery that will be in your pocket at all times.

I'm not going to be a 'Negative Nancy' like nearly every 2nd person (or more) across the net today...
It's going into a whole new era for Micrsoft!!!
New Microsoft CEO and a new Mobile Phone Company could be nothing but good for the Mobile Platform and maybe Microsoft Devices as a whole - The Services divisions are already doing extremely well.
Nokia could well become the design branch for Microsoft Devices (and I hope so) - just thinking a merging of the Lumia and Surface for the future especially with Elop as the EVP of Devices (unless he becomes CEO) bringing the design team from Espoo onboard as well!!
I can well see it being the Lumia Range for goodies up to the 6" then Surface Range above 6" - This works for me.

Me too. After the third reference on Baconit/Reddit, a heartbeat later I was here for the actual story.

Yes. Nokia broke, gets purchased by sole software supplier. That whole WP only move by Nokia was a dumb thing to do. Now if Android crushes both iOS and WP... Well I will not mind.

And terrible not because of quality, but because of the sheer number of OEMs on board with Android including the Samsung juggernaut.

True, I got a Galaxy Nexus for development and I hate that thing - it is so unintuitive.  So glad to go back to my L920 for daily use.

Why it should crush both? Sometimes I got feeling that android fans overcome apple fans. They want to see only android everywhere. There always will be people who likes WP, iOS or android. Lets make OS's not a war.

Better add me to this group. On the bright side, At least Apple, Google, or any other Android manufacturer aren't going to get Nokia's patents and force Nokia to do Android, let alone, patent troll Microsoft.

This.  I love Nokia, I love MS... I hope this works out... but am still very wary of it.  Let's not forget, and hope that MS learned some lessons from, when they bought Danger and practically killed them off with incompetent managment.  
Which, I know may be irrelevant since its seems that Nokia is continuing on as 'Nokia' rather than be folded in to some mis-managed dept within MS.  So that right there is already off on a good foot.

From the original article:
 
"One of the other interesting parts is how it was Microsoft that ended up with the low-end mobile phone business. It’s clear why Nokia wouldn’t want to exit the growing smartphone business, but remain in the declining feature phone business. But how it fits with Microsoft is less obvious."
 
So MS didn't buy the entire phone business? Nokia still owns its smartphone business?

No, Microsoft got it all, including Asha. I think this was just worded awkwardly. MS will have to keep up the Asha business for now, but I'm sure they will work to transition those customers to low-end WP devices over the long run.

You can't force developing countries users into smartphones, low end or not. You have to give them a stepping stone and entice them away. Those countries are dedicated Nokia users. Also,t he networks in many places do not have the speed and bandwidth to support millions of Lumia users.
 
If you were to abandon them --- now that would be a colossally stupid idea.
 
Do you people even think these things through before commenting?

Let me restate this for you, very slowly... "ooooooveeerrr the loooooong ruuuuuun."  As in, long term.  Asha is not a long term strategy for Microsoft.  Do you even think these things through before commenting or are you only able to consider what's in front of you right at the moment?
 
Asha devices are already considered somewhat low-end "smartphones."  Not necessarily smartphones in the sense that most of us are used to, but Nokia considers them a form of that given the very basic smartphone capabilities included in them.  For now, Microsoft will have to continue to support Asha as-is.  However, I expect that somewhere down the road, Microsoft will replace Asha with some form of low-end, very basic, Windows-based device. It might be some derivative of WP7 Tango (which is still used in some countries for much lower end devices) or it might be something else altogether, but it will eventually end up being *something* different than what Asha is today.

Of course, the other possibility is that Microsoft just spins off the Asha business or sells it so they don't have to deal with it.  Time will tell.

Just because it's a smartphone, doesn't mean it can't be priced as a feature phone. We are at a stage where smartphones can be competitively priced against feature phones.

So what happens to the Nokia Asha line of phones? Would this deal mean they will eventually ship with WP or be dropped from the portfolio?

The way I read it from them is that they want to keep them because its a good line in budget phones for the developing countries.

Hopefully they don't shut out the people at Nokia behind the innovation on the phones. They need to use the resources hey have.

You are assuming that the deal is good. Nokia does not make phones anymore, and I don't think everyone is very happy with that. It's a strong brand.

Your assuming the deal is bad. Nokia is still making phones just under a new name. And I'm fine with that.

Past, those 50 meetings they had with the board and directors would have also included investor opinion. Chances are this is only going forward because they know they have a majority support vote

Who gets the pureview tech. is that part of the devices and services division or the nokia advanced technologies division?

So MS thinks that Lumia brand is strong enough? Thinks that Lumia brand is stronger than Nokia Lumia? Really?

Just speculation here. Perhaps Ballmer stepping down was part of what was planned as part of something long term in case things didn't turn around quickly enough for Nokia, or they could only make this deal if someone Nokia trusted completely was at the helm of MS...

"Microsoft will also retain the ability to further innovate"...LOL yeah, because if someone was responsible for innovation on Windows Phones for the last 2 years it was Microsoft...not Nokia...
You can now sit and watch Microsoft ruining what was left of the Nokia brand with its lazy attitude towards WP. 10 years? Given the rate at which Microsoft gives up on projects, WP will be gone before that. And in the process they ruined the best phone manufacturers.

Does this mean that Nokia (or MS I don't know anymore) is going to have more funding and manpower for a full Windows 8 Lumia tablet?

So many folks in here thinks that Microsoft = amazing, whereas Nokia = just something to be eventually bought by Microsoft?? I suppose it is WP central, but that seems to equate to Microsoft Fanboy Central, rather than any interest in the other parts of the whole WP picture? 
I personally bought my phone for the quality of the Nokia hardware, not the OS - although I do like it, but I would've bought a Nokia Android if they'd gone that way too. Just look at the 920, 925, and 1020 - the glove friendly screen, the wireless charging, the build quality, the unbelievable cameras... this isn't MS innovation, it's been mostly Nokia. Most of the things I dislike about the phone seem to be the OS (no separate volume controls, lack of consistency re: vertical/horizontal movement, utterly sh*t zune player on earlier 800 model, poor notifications management...)
Elop is apparently awesome too by reading many comments? So to be awesome you apparently need to...
-go into a company that is struggling but still has massive innovation going on and that has a new OS that could turn things around but force them to ditch everything they're currently doing; 
-make sure your speech about Nokia being on a burning platform gets leaked; 
-demand the existing platforms and newly developing OS are completely abandonded and tie the company to a single operating system, which just so happens to be from the company you've come from; 
-don't allow the Pureview 808 to be properly marketed and even stuff your own company by saying at launch that the N9 is the last Symbian product (great support there for your own product Mr Elop!).
-decimate western production facilities in one of the most sustainable and ethically responsible tech companies in the world and shift nearly all production to China, creating huge impacts in Finland where people were paid a decent amount and had decent working conditions (screw that though eh, if it means it adds $50 to your 'me me me, I need it now' tech buying public huh?!- who cares about slave working conditions anyway?) 
-launch a range of smartphones tied to the WP platform, and yet despite 'growth' (it's not hard to 'grow' if you start from zero!), they're still selling at half the numbers that Symbian were in 2011; 
-claim to work for Nokia, yet tie the fate of the company to only a single possible outcome by abandoning years of development and expertise in competing operating systems, which only benefits Microsoft alone; 
-tidy things up for an MS acquisition, Nokia board clearly just protecting their own as*ses and go along with it, despite the ludicrously low price being offered;
-head back to your previous company, possibly becoming the next CEO to boot, essentially having asset stripped the best phone hardware company in the world...and watch 20ish years of Nokia phone brilliance disappears forever.
Man I love the American version of capitalism! screw everyone as long as it's not yourself. The Finns were very naive in the end, and he was clearly, as the cynics pointed out, a trojan horse.  Who knows what would have happened to Nokia had they chose someone other than Elop? They will obviously continue in a different guise with their other operations, just as they always have since their beginnings, making paper, then rubber boots, tyres and the like... but it is a sad end to an amazing story - with only 5 million people, Nokia has been a massive deal for Finland, and losing this company has had and will continue to have a massive impact in so many ways... but life of course will go on. 
My meander into Windows Phone will end now though, and the Lumia 920 will be on eBay come Friday... I need to get me a Jolla phone when they're released! - here's hoping the Finns at Jolla can follow in a giant's footsteps and create another 'Nokia' for Finland... I doubt it, but I live in hope. ... in the meantime, I might have to wander over to the Korean side for now. 
As a parting comment, If Microsoft thinks it will sell a heap of phones here in Europe now just as Lumias were gaining traction, I think it will get a bit of a surprise. 

 

This may sound like a stupid question, but are there any plans to purchase "Microsoft" branded computers? The biggest problem with Windows computers are the infinite hardware configurations and the comparability issues that arise in updates in such. The problem is further compounded when you try to get them to warranty work on them. A nightmare. If you could buy a Microsoft computer at a Microsoft store, and have any repairs or issues dealt with directly at a Microsoft store, you would make a lot of people very happy.

i knew windowphone os will have to ask nokia for their map services thats great but i dont think buying nokia is a pretty good  idea unless the name will remain any way is a step ahead at least it will bring better performance as they both match