{"id":56,"date":"2013-09-02T22:15:00","date_gmt":"2013-09-02T22:15:00","guid":{"rendered":"https:\/\/www.appleoutsider.com\/?p=56"},"modified":"2020-08-07T03:20:51","modified_gmt":"2020-08-07T03:20:51","slug":"nokia2","status":"publish","type":"post","link":"https:\/\/www.appleoutsider.com\/2013\/09\/02\/nokia2\/","title":{"rendered":"Microsoft Buys Nokia for \u20ac3.79B"},"content":{"rendered":"\n

OK, so\u00a0I got the price wrong<\/a>.<\/p>\n\n\n\n

In a surprise\u00a0Labor Day announcement,\u00a0Microsoft is acquiring Nokia\u2019s devices and services business<\/a>.<\/p>\n\n\n\n

I already said most of what I think about this pairing two and a half years ago. If you get past that melodramatic headline, most of it still holds. But I liked it a lot more when the year was 2011 and the price was (even if rhetorically) free. What\u2019s happened since then to justify going all-in now<\/em>?Now all I have is a pile of questions:<\/p>\n\n\n\n

1) Why was this announcement made\u00a0after<\/em>\u00a0throwing Ballmer out<\/a>? That news came a mere ten days ago. Combine this Nokia news with\u00a0the big reorg<\/a>, and you have a much more lucid claim that things are changing in a big way. If Ballmer were to announce his retirement this week, it\u2019s a lot easier to credibly claim Microsoft is taking a new direction and that it\u2019s time for new leadership.<\/p>\n\n\n\n

2) Knowing that Ballmer is a lame duck, is this his deal, or the board\u2019s? If it\u2019s his deal, that\u00a0straitjacket<\/a>\u00a0just became an iron box. If it\u2019s the board\u2019s deal,\u00a0why is his name on the announcement<\/a>? (\u201cHe\u2019s not gone yet\u201d is not a good answer. He\u2019s gone.)<\/p>\n\n\n\n

3) A lot of problems at Microsoft, from\u00a0a poisonous adversarial culture<\/a>\u00a0to a\u00a0lack of vision<\/a>,\u00a0have been illuminated in the last few weeks. Who honestly thinks this merger will solve any of them? (Bad acquisitions<\/a>, by the way, are a piece of Ballmer\u2019s legacy that has been, in my opinion, underreported since the news of his retirement broke.)<\/p>\n\n\n\n

4) The Elop-as-next-Microsoft-CEO buzz\u00a0has already begun<\/a>. Why?\u00a0How\u2019s he done at Nokia<\/a>? The only \u201crational\u201d reason to have him succeed Ballmer is that he seems like an appropriate successor to Ballmer in every way \u2014 in other words, he absolutely should not get the job. Kara Swisher loves the\u00a0vapor-video<\/a>\u00a0he apparently commissioned. I prefer\u00a0Bret Victor\u2019s<\/a>\u00a0take on these sort of things. Note Victor\u2019s repeated, damning use of the v-word.<\/p>\n\n\n\n

5) Nokia was already making very nice Windows Phone hardware. And the Windows Phone software, while not making a huge market share dent, has been routinely praised. What, then, has been the problem \u2014 and again, is this merger really the solution? This is easy to answer with another question: How would the Lumia line be selling\u00a0if it ran Android<\/a>, and without Nokia as a Google subsidiary?<\/p>\n\n\n\n

6) Microsoft just disclosed it only makes\u00a0$10 per Nokia phone sold<\/a>. Gross margins per unit are estimated at $40. When, if ever, will this deal pay for itself? What does today\u2019s news have to do with increasing either unit sales or device margins?<\/p>\n\n\n\n

One thing must be observed: all the major mobile players \u2014 Apple, Google, Microsoft, and oh what the hell, BlackBerry \u2014 now own a top-to-bottom technology stack. Alan Kay was\u00a0right as ever<\/a>\u00a0when he said \u201cPeople who are really serious about software should make their own hardware.\u201d<\/p>\n\n\n\n

But Microsoft needs to be thinking big and ahead, and removing burdens. I just don\u2019t think its inherent ills can be cured, or even disturbed, by this deal. Assuming nothing fundamentally changes at the top, I believe it will be a complication that only accelerates the fall of a giant.<\/p>\n","protected":false},"excerpt":{"rendered":"

OK, so\u00a0I got the price wrong. In a surprise\u00a0Labor Day announcement,\u00a0Microsoft is acquiring Nokia\u2019s devices and services business. I already said most of what I think about this pairing two and a half years ago. If you get past that melodramatic headline, most of it still holds. But I liked it a lot more when […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[4],"tags":[],"_links":{"self":[{"href":"https:\/\/www.appleoutsider.com\/wp-json\/wp\/v2\/posts\/56"}],"collection":[{"href":"https:\/\/www.appleoutsider.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.appleoutsider.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.appleoutsider.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.appleoutsider.com\/wp-json\/wp\/v2\/comments?post=56"}],"version-history":[{"count":0,"href":"https:\/\/www.appleoutsider.com\/wp-json\/wp\/v2\/posts\/56\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.appleoutsider.com\/wp-json\/wp\/v2\/media?parent=56"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.appleoutsider.com\/wp-json\/wp\/v2\/categories?post=56"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.appleoutsider.com\/wp-json\/wp\/v2\/tags?post=56"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}