Nokia and Microsoft - winners and losers

Nokia Lumia phone being demonstrated

It is a shock - but hardly a surprise.

Two years after Nokia's Stephen Elop told his company it was leaping off the "burning platform" of its Symbian operating system and switching to Windows Phone, the relationship with Microsoft is becoming a marriage.

With Nokia the only company making Windows Phone handsets its first priority, it was inevitable that Microsoft would want full control. After all, its whole strategy for playing catch-up with Google, Apple and Samsung in the new world of the mobile internet depends on finally getting some impetus behind Windows Phone.

So who wins and who loses from this deal? Nokia shareholders may be breathing a sigh of relief. Yes, they are only getting $7bn for a business that had a market capitalisation of $150bn in 2007. But the 40% rise in the share price this morning shows they feel this is a far better outcome than they might have expected after years of decline.

As for Microsoft, it will be a while before we know whether Steve Ballmer's last big gamble as CEO has paid off. He sees this deal as the final piece in the jigsaw, in his strategy to turn the software company into a devices and services business.

Steve Ballmer Microsoft CEO Steve Ballmer: His last gamble?

He told me this morning he was keeping on driving ahead while the board looks for a successor - and defended his record as CEO: "We've done a great job for shareholders," he said.

But even the presentation about the deal at the Helsinki press conference talked of beating Blackberry for third place in the mobile phone market - and Microsoft's investors may find that number three is not a very profitable place to be.

For Finland and for Europe as a whole, this must be seen as a sad day. It is hard to remember just how recently Nokia was Europe's technology superstar, with a 40% share of one of the world's fastest growing industries and a proud record of innovation.

Now, the day after another European telecoms giant Vodafone gave up on its American ambitions, the US is swallowing up Nokia. Europe set the pace in the early stages of the mobile phone revolution - now it is American and Asian companies which are shaping its future.

Rory Cellan-Jones Article written by Rory Cellan-Jones Rory Cellan-Jones Technology correspondent

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  • rate this

    Comment number 23.

    22 Alex.
    People hate Iphone because. You have to buy into the ecosystem with music on iTunes and have to give up your money if you move to Droid or Windows. They dont update instead you have to buy the same hardware with new OS and its made buy the greatest innovator whom never make anything, so how can they innovate. Its at best a niche product for those who cant handle the 21st century

  • rate this

    Comment number 22.

    @7 You have hit the nail on the head!
    @9 Get over yourself...precisely what do you want to do that apple are preventing? Hmm? I'm a techie and I have yet to find anything that the iPhone can't do...that is relevant to today anyway
    @14 People buy phones to run Java? (although i think you mean flash) are being mugged off by power hungry security hole nightmare buggyness.

  • rate this

    Comment number 21.

    @ 14. spindoctor

    "People who buy Apple Products are mugged by shiney shiney"

    Second best quote I have heard, the other is Iphone are phones for sheep

    @ 12. stephenlowefinland

    "Microsoft-Nokia may garner Motorola into the loop"

    Would have to buy it off Google first.

  • rate this

    Comment number 20.

    How much of a fashion accessory is an iPhone? Well, put it this way: You can buy protective cases with a hole cut in them so everyone can see it's an iPhone that you're protecting.

    Kind of like cutting a hole in a crash helmet so everyone can see your tattoo.

  • rate this

    Comment number 19.

    Shane from Croydon: "Imagine all your business, social and personal ICT needs all integrated across your device suite. "

    Hmm. You could call that, erm ... Apple, couldn't you?

  • rate this

    Comment number 18.

    I am now using a blackberry which is giving me problems
    After my struggles with an Iphone , Samsung and Nokia

    This one gets hot when charging it, after it is fully charged I
    Cant quiet get my head around why?

    Microsoft please promise me my problems will now disappear?

  • rate this

    Comment number 17.

    Nokia were very good, why they dropped Symbian we will never know, it was the most used mobile OS (Yes Mcheads your niche product has never been a best seller) before Android took the reins. Problem is they stopped and stood still for a year or so and by then it was too late. they used to produce Iphone killers now they cant compete with that rubbish MS have a mountain to climb

  • rate this

    Comment number 16.

    Having previously owned two iPhones and a Samsung Galaxy, I now have a Nokia Windows Phone. I loved my iPhones, but got bored with the user interface. The Android phone felt like a cheap nasty copy of iOS. My Lumia is a breath of fresh air. People should be less afraid of switching to Windows Phone, it's very well designed and a joy to use and the Nokia handsets are great.

  • rate this

    Comment number 15.

    Having owned Iphones ,HTC Windows, and Samsung Galaxy mobiles. The truth is that Iphones ARE bricks. Compared to Htc and Samsung. But cost twice as much, why?

  • rate this

    Comment number 14.

    Quote// 13. Milton
    ... There's no new competition for iPhone, who will still release a far superior handset in a few weeks than Microsoft will ever be able to match.//

    The Iphone is Crippleware, the functionality is impaired because apple will not allow use of Java on their phones. Makes them nothing more than a paperweight

    People who buy Apple Products are mugged by shiney shiney

  • rate this

    Comment number 13.

    Microsoft have just bought a lemon. Nokia were good in the early 2000s when they had a reliable handset and had the market share. Now they can only make second rate handsets that barely function as a phone. There's no new competition for iPhone, who will still release a far superior handset in a few weeks than Microsoft will ever be able to match.

  • rate this

    Comment number 12.

    Microsoft-Nokia may garner Motorola into the loop. Turn Finland into a R&D center with skeleton staff and move production to Mexico & India.

    Whilst getting married to Nokia, will Microsoft receive a cold-shift from the Asian lovers where the largest consumers reside?

    Microsoft might end up gaining Nokia but losing the massive Asian market.

  • rate this

    Comment number 11.

    I think like every merger the wild guesses as to winners and losers is too early to tell. Nokia have a great brand (one that has brought new products to the table of the years), suffering of late and Microsoft who have a vast team of developers. The Lumia phones and WMP8 are a good mix. Apple have rested on the core aficionados, but innovation lately nah. We may see more Nokia tech in next Surface

  • rate this

    Comment number 10.

    I say it again... Microsoft and Nokia is a marriage made in heaven. If they had some inspirational leadership, they could build the ultimate convergence platform. Imagine all your business, social and personal ICT needs all integrated across your device suite. They could port Xbox games, web, cloud, Office 364. They should be able to blow everyone out of the water in about 3 years.

  • rate this

    Comment number 9.

    @7 "It's a solid product for EVERYONE techie or not techie"

    I'm "techie", electronics engineer/designer to be exact, I can't get on with iPhone and all it's restrictions, all the advanced stuff/options are either hidden, blocked or require some illogical gesture/control to get at them.
    Don't even get me started on the way Apples OS handles files, it's soooo backwards.

  • rate this

    Comment number 8.

    Why do some tech businesses think they are obliged to continually spread into new markets, as opposed to perfecting their core products?

    If the latest MS O/S was excellent (it's far from it), and people were fighting to buy their tablet (they aren't), it would be OK to keep expanding like this. However ...

    And anyway, there's nothing paradigm-shifting about the MS phone. See Apple for that!

  • rate this

    Comment number 7.

    "Just wish people would stop jumping on the 'I hate iPhone' bandwagon - it really is a solid product for anyone who isn't techie."

    It's a solid product for EVERYONE techie or not techie.

  • rate this

    Comment number 6.

    I'd question your analysis. It's merely a "40%" rise in a share price that had fallen 75% since Elop's burning platform speech on 4th February 2011. I wouldn't be a happy bunny if I were a Nokia shareholder.

  • rate this

    Comment number 5.

    I was a big fan of Nokia until about 2 years ago when I decided to try the Android Nexus phone as i was really impressed with friends Android phones and it is fantastic. And I've even just bought the Android Nexus tablet. I'd really like to try a Nokia/Windows phone and Windows tablet but i know nobody who has either to try them.

  • rate this

    Comment number 4.

    @1, perhaps read the whole sentence?

    "With Nokia the only company making Windows Phone handsets its first priority"


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