Newsletters
News & Information for Technology Purchasers NewsFactor Sites:       NewsFactor.com     Enterprise Security Today     CRM Daily     Business Report     Sci-Tech Today  
   
This ad will display for the next 20 seconds. Click for more information, or
Home Enterprise I.T. Cloud Computing Applications Hardware More Topics...
GET RECOGNIZED.
Let an ISACA® certification
elevate your career.

Register today and save
Microsoft/Windows
Next Generation Data Center Is Here!
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.



APC has an established a reputation for solid products that virtually pay for themselves upon installation. Who has time to spend worrying about system downtime? APC makes it easy for you to focus on business growth instead of business downtime with reliable data center systems and IT solutions. Learn more here.


 Microsoft/Windows
1.   Microsoft Spreads Cortana Abroad
2.   China Puts Microsoft Under the Lens
3.   Win Phone 8.1 Update Already on Way
4.   Yammer Moved to Office 365
5.   Can One Size Windows OS Fit All?


advertisement
China Puts Microsoft Under the Lens
Official anti-monopoly probe launched.
Average Rating:
Microsoft CEO Sees 'Bold' Plan Ahead
With unified Windows for all platforms.
Average Rating:
Design Central to Microsoft Future
New ethos a break from functional past.
Average Rating:


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

Network Security Spotlight
New 'Backoff' Malware Slips Undetected into Retail Systems
'Malicious actors' are using a new variety of malware to access consumer payment data remotely through point-of-sale systems, according to a report from the Department of Homeland Security.
 
IBM Beefs Up Identity Intelligence Security Solutions
Big Blue is betting big on identity intelligence. IBM just acquired a private firm with security software to govern user access to apps and data across cloud and on-premise environments.
 
USB Security Flaw Lets Hackers Hijack PCs
Hackers can use the firmware that controls USB functions to take control of computers, say security experts. That means there may be a new class of attack for which there are no defenses.
 

Enterprise Hardware Spotlight
AMD's ARM-Based Opteron Out in $3K Dev Kit
It's dubbed "Seattle" and it's AMD's first 64-bit ARM-based Opteron processor. The low-power chip is being released as part of AMD’s Opteron A1100-series developer kit, and aimed at high-end data center needs.
 
Apple Updates MacBook Pros, Cuts Prices Up to $100
The popular MacBook Pro laptop line just got an update and a price cut of as much as $100. The MacBook Pro with Retina display now includes faster processors and double the memory.
 
Dell, BlackBerry Not Sweating Apple-IBM Alliance
IBM's recent move to partner with Apple to sell iPhones and iPads loaded with corporate applications has excited investors in both companies, but two rivals say they are unperturbed for now.
 

Mobile Technology Spotlight
Virgin Mobile Offers Custom Smartphone Plans
As the wireless carrier wars continue heating up, Virgin Mobile just threw the customization coal onto the fire. The firm has debuted a no-annual-contract plan with rates based on individual use.
 
Collaboration Provider Asana Revamps Mobile App
Asana, a collaboration software provider started by a Facebook founder, is now out with a rebuilt native iOS mobile app. It replaces one that even the company admits was not up to par.
 
FTC Wants Fix for 'Perfect Scam' of Mobile Cramming
The U.S. Federal Trade Commission has issued new guidelines to curb “mobile cramming,” a troublesome practice that adds unauthorized third-party charges to mobile phone bills.
 

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.