Newsletters
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...
Neustar, Inc.
Protect your website & network
using real-time information & analysis

www.neustar.biz
Mobile Tech
24/7/365 Network Uptime
Average Rating:
Rate this article:  
Did Microsoft Make a Smart Buy with Nokia?
Did Microsoft Make a Smart Buy with Nokia?

By Jennifer LeClaire
January 23, 2014 12:23PM

    Bookmark and Share
Whether Microsoft made a smart buy with Nokia will depend on the answers to two key questions: Will the Nokia handset business really start to do well after the Microsoft acquisition? How does Nokia plan to show growth going forward once it spins off its handset business?
 

Related Topics

Microsoft
Nokia
Acquisition
Lumia



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.”
 

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.



You have the experience and skills, let an ISACA® certification demonstrate your value. Our certifications announce that you have the expertise and insight to speak with authority. ISACA certification is more than a credential; it's a platform that can elevate your career. Register for an Exam Today.


 Mobile Tech
1.   LG Unrolls a TV Screen That Rolls Up
2.   Silent Circle Offers Roam-Free Plan
3.   LinkedIn Replaces Contacts Mobile App
4.   Is Apple Dumping iPhones on eBay?
5.   Data Recovered from 'Wiped' Phones


advertisement
Android SMS Worm on the Loose
Malware lets bad actors cash in.
Average Rating:
Review: Microsoft's Surface Pro 3
Is it a tablet and laptop replacement?
Average Rating:
Review: Huawei's Mate2 Impressive
Many features for a reasonable price.
Average Rating:


advertisement
Product Information and Resources for Technology You Can Use To Boost Your Business

Network Security Spotlight
Report: Chinese Hackers Hit U.S. Personnel Networks
Hackers from China broke into the computer networks of the U.S. Office of Personnel Management earlier this year with the intention of accessing the files of tens of thousands of federal employees.
 
Charges: Russian Stole Data from U.S. Restaurants, Zoo
A Russian man arrested on bank fraud and other charges hacked into computers at restaurants in Washington, hundreds of other retail businesses, and even the Phoenix Zoo, authorities say.
 
Another Month, Another IE-Focused Patch Tuesday
Microsoft rolled out 59 vulnerabilities for Internet Explorer in June. But the IE-patching party is not over yet. Redmond published six new security bulletins on Tuesday; two, critical; three, important.
 

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 | Small Business | 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 | XML/RSS Feed

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.