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 83.

    Nokia had a proud record of innovation until Elop was employed. Most of what came after were mainly remnants of before him. The Lumia design? Actually the 'Fabula' design from the N9. Reused again and and again. The 1020? Most of the that came from the 808 PureView and likely was meant for for an 808 successor.

    Elop; a true Trojan horse. The only thing he was good at.

  • rate this

    Comment number 82.

    I'm pleasantly surprised to find I'm not the only Apple hold out - and I'm looking forward to Windows phone developing.

    And Mr Balmer - we don't all want "apps". I prefer 1 browser with 50 bookmarks as opposed to 50 "apps" cluttering my screen(s).

  • rate this

    Comment number 81.

    Who do you have to pay at the BBC to not be censored?

  • Comment number 80.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 79.

    I don't really understand the focus on what's on the shelf today. They are looking at tomorrow, where the game is heading. The gap between mobile phone and laptop is shortening, and soon the same device will act as the mobile phone and base unit. And Microsoft will have a business device that has windows, is a phone/laptop/base unit, and businesses will buy it.

  • rate this

    Comment number 78.

    I just want my Nokia Lumia 620 to work with Nokia PC Suite .
    Very annoying .

  • rate this

    Comment number 77.

    I should clarify a couple of points I raised earlier: by Clunky I mean Windows OS lacks features although it does work quickly. With regard to "apps" I measure this not by the size of the global app market, but how often I have wanted to download a useful app only to find there is not a windows version :-(

  • rate this

    Comment number 76.

    The problem is I don't see where WP8 fits in...

    Android - open, customisable, 'complex', cutting-edge
    iOS - closed, 'simple', safe
    Blackberry - 'messaging experts' (although that's debateable nowadays)

    WP8 - ??? it seems to be aiming to have the same characteristics as iOS, but, by definition, most of the people that appeals to are people who will 'play it safe' - so they'll stick with iOS.

  • rate this

    Comment number 75.

    @45 andie99uk
    "I have used Windows phones since 6.5 It's such a great OS"

    I have to disagree 6.5 was the worst iteration of winmo, and a failed attempt to make an average O/S more 'finger friendly'. I have to use these as enterprise devices and 6.1 was far superior. Ironic that styluses are making a comeback.

  • rate this

    Comment number 74.

    @ Alex Robinson
    I think the difference with Android and iOS is the speed at which features come to market. I was using NFC, wifi tethering and could take panoramic pics before any of those were on the iPhones. The current iPhone5 is ~equal with Android phones now, give it another 2 months and they'll be behind again, at which point people start prentending to care what their smartphone is made of

  • rate this

    Comment number 73.

    Elop Sold Nokia at "discount" to MS & then moved to MS immediately.
    This might be considered as Violation of Civilised Business Ethics & Conflict of Interest, whilst Chairman with Board of Directors of Nokia simply watched.

    This confirms the fact that, "Finns Cannot Sell".

  • rate this

    Comment number 72.

    I've got one of the last Symbian phones (701) and a Galaxy S3 and access to a Nexus. I've briefly used Iphone and a Lumia, the Android devices are way ahead of the others.

  • rate this

    Comment number 71.

    The size of an "apps" store catalog is not a good metric as most are rubbish, and a huge amount are classed as Zombies iPhones are great as a easy lead into a smartphone, but they are hyped by great marketing, Android may have a large apps store but suffer from malware. WMP is not a clunky OS quick for me compared to my iPhone,

  • rate this

    Comment number 70.

    I've always liked Nokia phones. Well up until 15 months ago when I was persuaded to buy a Windows phone. The OS is clunky when compared with Apple and Android and still very few apps. Despite Microsofts size I cannot see them succeeding in the phone market. Luck was on their side in the 90s as a late arrival in the browser wars, but they don't have the same advantages this time around.

  • rate this

    Comment number 69.

    10 years ago I was a software engineet at Nokia. We used to make jokes against Microsoft and its Windows OS. We all disliked how Windows was functioning and saw it as poor alternative. We loved Sympian and Linux instead and felt technically very confident. None of us could forsee this very day. Ofcourse the world has changed and so did Nokia. What a change!

  • rate this

    Comment number 68.

    Nokia Finnish Chairman & CEO of Nokia Jorma Ollila brought in Stephen Elop from MS to resurrect ailing Nokia from a CEO who was caught smuggling personal items without paying Customs duty.

    Elop did his job. Scoring Top points with MS, priced Nokia at low price.

    Blame Chairman, & Board of Directors at Nokia, for letting Elop to "Have the Cake and Eat it", right under their incompetent noses.

  • rate this

    Comment number 67.

    Nokia bought bankrupt Salora Mobile phones in 1979, changed name to Nokia. That is 34 not 150 years as Chairman Nokia & acting CEO sparks!

  • rate this

    Comment number 66.

    Was Stephen Elop the "Trojan Horse" inserted by MS to acquire Nokia cheaply at a bargain-basement price?

  • rate this

    Comment number 65.

    Nokia Stephen Elop deal Buy & Sell to Microsoft. Was that Conflict of Interest violating standard Business Ethics?

  • rate this

    Comment number 64.

    Does the Microsoft deal to acquire Nokia cellphones include the Indian Tax demand of Nokia-India?


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