News & Information for Technology Purchasers NewsFactor Sites:       NewsFactor.com     Enterprise Security Today     CRM Daily     Business Report     Sci-Tech Today  
   
Home Enterprise I.T. Cloud Computing Applications Hardware More Topics...
Gartner ranks Druva #1
in overall product rating for enterprise endpoint backup
for the second year in a row!
You are here: Home / World Wide Web / Microsoft's Nokia Buy: A Bad Deal?
Gartner's #1 for endpoint backup
Did Microsoft Make a Smart Buy with Nokia?
Did Microsoft Make a Smart Buy with Nokia?
By Jennifer LeClaire / NewsFactor Network Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
JANUARY
23
2014


Risto Siilasmaa, Nokia Chairman and interim CEO, called Nokia’s fourth quarter a “watershed moment” in the company’s history. Some analysts beg to differ.

Sales of the company’s flagship Lumia Windows phone dipped in the fourth quarter of 2013, despite the expected boost from the holiday shopping season. That’s bad news for both Nokia and Microsoft, especially considering Redmond has bet $7 billion on Nokia’s handset business through an in-progress acquisition.

Microsoft is in the middle of acquiring Nokia’s Smart Devices business unit, including the Lumia brand and products. Lumia handsets have won numerous awards and had grown in sales for three consecutive quarters, with sales reaching 7.4 million units in the second quarter of 2013.

But the story is suddenly changing. Nokia’s handset revenue declined a startling 29 percent in the fourth quarter of 2013 compared the year-ago period. The report was also a 4.5 percent dip from the previous quarter.

False Sense of Security?

Nick Dillon, a senior telecommunications analyst at the research firm Ovum in London, told the New York Times that "Breaking into the high-end market was always going to be a challenge for Microsoft and Nokia because Windows phones still don’t offer the same level of applications that are available on Android and Apple’s iOS. The software is still lagging behind."

We caught up with Jeff Kagan, an independent technology analyst, to get his take on the Nokia news. He told us the quarterly numbers continue to look worrisome.

"Nokia has shown a slow, but steady level of growth for a while with smartphones. They have roughly 4 percent of the market," he said. "Has that given us a false sense of security?"

Of course, Nokia is hardly the only wireless handset maker to struggle. BlackBerry has made more than its fair share of headlines for poor performance. Indeed, Kagan noted, most handset makers are struggling in some way shape or form, save Apple and Samsung. But considering Nokia was the number one handset maker for more than a decade, it’s a high-profile struggle.

Two Key Questions

“The Nokia handset business will be acquired by Microsoft. Could that be what Nokia needs to breakout? While the acquisition is not a bad thing, I don’t see that event alone being enough,” Kagan noted.

“It’s not like Microsoft has been hitting it out of the park on their own, either. This sounds similar to when Google acquired the Motorola handset business not long ago. Sure, it changed the business -- but Motorola is not breaking any records yet, either.”

As Kagan sees it, there are two key questions that need to be answered: Will the Nokia handset business really start to do well after the Microsoft acquisition? How does Nokia plan to show growth going forward once they spin off their handset business?

“These are not easy to answer,” said Kagan. “Going forward, Nokia will not be the same company we have all grown to know over time. Whether they are successful or not is entirely up to them. Let’s hope for the best.”

Read more on: Microsoft, Nokia, Acquisition, Lumia
Tell Us What You Think
Comment:

Name:

geez...:

Posted: 2014-01-25 @ 3:02am PT
What a messed up train of thought...
Nokia position will be a good one,
look at the results! so going forward
they will be profitable with the cash for expansion! what dont you get?

The smartphone issue is now effectively in MS's hands. hopefully the consolidation will give MS more room for better pricing. and some heavy ads.
Motorola was about patent portfolio primarily. the reference phones was a way to utilize the new company....
how can you get this so wrong?

Stratego:

Posted: 2014-01-23 @ 3:41pm PT
The problem is not Nokia handsets (hardware), but the software they run. It is Microsoft that needs a turnaround after a lacklustre decade. Embrace Android (i.e. Open Source) and leverage your strenghts to put a corporate layer on top of it. Either Microsoft/Nokia or BlackBerry, that's the survival recipe for one of them. Unless they keep waiting until somebody else (Samsung?) cracks the code to put a corporate layer on top of what is essentially a consumer device.

Like Us on FacebookFollow Us on Twitter
TOP STORIES NOW
MAY BE OF INTEREST
IT departments are embracing cloud backup, but there's a lot you need to know before choosing a service provider. Learn all the critical things you need to know by accessing the white paper, "5 Things You Didn't Know About Cloud Backup". Access the White Paper now.
MORE IN WORLD WIDE WEB
Product Information and Resources for Technology You Can Use To Boost Your Business

Network Security Spotlight
Dairy Queen Latest Retailer To Report Hack
Dairy Queen is known for its hot fries and sweet treats, but it just made cyber history as the latest victim of a hack attack. The fast food chain said that customer data at some stores may be at risk.
 
Lessons from the JPMorgan Chase Cyberattack
JPMorgan Chase is investigating a likely cyberattack. The banking giant is cooperating with law enforcement, including the FBI, to understand what data hackers may have obtained.
 
Who Is the Hacker Group Lizard Squad?
Are they dangerous or just obnoxious? That’s what many are wondering about the hacker group Lizard Squad, which tweeted out a bomb threat that grounded a flight with a Sony exec aboard.
 

Enterprise Hardware Spotlight
HP Previews ProLiant Gen9 Servers
Because traditional data center and server architectures are “constraints” on businesses, HP is releasing new servers aimed at faster, simpler and more cost-effective delivery of computing services.
 
Apple Set To Release Largest iPad Ever
Tech giant Apple seems to have adopted the mantra “go big or go home.” The company is planning to introduce its largest iPad ever: a 12.9-inch behemoth that will dwarf its largest existing models.
 
Alert: HP Recalls 5 Million Notebook AC Power Cords
HP is recalling about 5.6 million notebook computer AC power cords in the U.S. and another 446,700 in Canada because of possible overheating, which can pose a fire and burn hazard.
 

Mobile Technology Spotlight
Apple Sets Sept. 9 Event: iPhone 6, iWatch on Tap?
Save the date. Apple formally announced that its long-anticipated “special event," will take place on September 9. Does the tech giant have the iPhone 6, and the iWatch up its sleeve?
 
Samsung's New Smart Watch Makes Calls Without Phone
Following up on the Gear 2, Samsung has unveiled a new 3G smart watch, the Gear S, that stands out in its ability to make phone calls and send text messages without a smartphone.
 
Apple Set To Release Largest iPad Ever
Tech giant Apple seems to have adopted the mantra “go big or go home.” The company is planning to introduce its largest iPad ever: a 12.9-inch behemoth that will dwarf its largest existing models.
 

Navigation
NewsFactor Network
Home/Top News | Enterprise I.T. | Cloud Computing | Applications | Hardware | Mobile Tech | Big Data | Communications
World Wide Web | Network Security | Data Storage | CRM Systems | Microsoft/Windows | Apple/Mac | Linux/Open Source | Personal Tech
Press Releases
NewsFactor Network Enterprise I.T. Sites
NewsFactor Technology News | Enterprise Security Today | CRM Daily

NewsFactor Business and Innovation Sites
Sci-Tech Today | NewsFactor Business Report

NewsFactor Services
FreeNewsFeed | Free Newsletters

About NewsFactor Network | How To Contact Us | Article Reprints | Careers @ NewsFactor | Services for PR Pros | Top Tech Wire | How To Advertise

Privacy Policy | Terms of Service
© Copyright 2000-2014 NewsFactor Network. All rights reserved. Article rating technology by Blogowogo. Member of Accuserve Ad Network.