Steve Ballmer’s last gasp before blundering into that good night is buying the mobile phone portion of Nokia. This means that Stephen Elop, the Nokia’s president and former Microsoft employee, is a favorite to replace Ballmer. It also concludes Elop’s fairly disastrous attempt to resuscitate Nokia, or his extremely successful attempt to prepare it for a Microsoft takeover.
Though Nokia was a pioneer in the smartphone market, they always had an issue with their smartphone operating system. At the time Elop took over, they were struggling to milk their outdated Symbian platform and introduce a new operating system, Maemo or Meego. Elop shut those efforts down and pushed Nokia’s high-end smartphone product line to Microsoft’s Windows Phone platform, with disastrous financial results. Nokia has been bleeding money in part because Windows Phone is a complete do-over of mobile for Microsoft, and therefore lacking in comparison to its more mature competition. Though Nokia was able to sell a few more of their flagship phones after Windows Phone became more competitive, customers consistently preferred Android and Apple phones, and Nokia was poised to have a terrible Q3. Microsoft’s takeover offer includes €1.5bn of “immediate financing” which indicates that there’s some kind of cash crunch at Nokia.
One of the strengths that Nokia has kept throughout their Windows Phone foray is the ability to market cheap phones in developing countries. Their latest effort is the Asha series, which does not run Windows. One of the rationales of this acquisition, which includes the Asha brand of feature phones and “borderline” smartphones, is that people owning Nokia Asha phones will be likely to buy Nokia Windows phones. Maybe. If Microsoft can lock Asha owners into the Windows ecosystem, which means getting their email via Microsoft’s Outlook.com, and storing their pictures on Skydrive, this could happen. But those services also run on Apple and Android phones, so it’s still going to be a tough push to get people to buy Windows Phones. Look at Motorola, which owned the dumb phone market with the Razor but has struggled with smartphones, for your clue on whether that can work.
Ballmer was fired for many reasons, but one is that he completely screwed up mobile. Under his leadership, Microsoft clung to a completely outdated version of Windows Mobile while Apple and Google were bringing out great new mobile operating systems. When he finally realized that the only way to compete was to to start over, Microsoft produced a decent mobile operating system, rebranded as Windows Phone, years too late. At the same time, Ballmer ghettoized Windows Phone to the phone because he was focusing on pushing bloated full-size Windows down to tablets instead of, as Apple and Google did, pushing their mobile product up onto tablets. Windows RT, which powers the Surface, was recognized as a pretty big piece of shit, and the fact that millions of Surfaces sit in warehouses because Ballmer et al thought it was going to be a raging success just shows how insular and out-of-touch his leadership team was.
After Nokia went full-on Windows for smartphones, it got so cheap that Microsoft’s acquisition is almost a no-brainer if they are going to keep competing in the smartphone market. Microsoft paid less for Nokia than they did for Skype. And Nokia, as they always have, produces some nice hardware. So this thing might work, but so far it’s yet another ugly example of how Microsoft is struggling to be successful anywhere but Windows on the desktop and Office, and Xbox.
Everybody needs a bosom for a pillow, everybody needs a bosom…
It’s a shame about Nokia. I couldn’t care less about Microsoft, even back when I bought Microsoft products I hated them, but I have fond memories of Nokia’s old workhorse phones from the pre smartphone era. My father still has one he bought in the 90s and it still works just fine.
The problem with Windows 8 is that its purpose is to capture its base of Windows PC customers over to its smartphones and tablets, and not to truly fit the needs (or even wishes) of PC users. That’s why such a high proportion of people have reacted to their Windows 8 experience with such repulsive annoyance, even though you will find a substantial faction who actually like the “charms bar” and can refer to it without feeling utterly silly or snarky.
My father is a bit of a technological pack rat. Not only does he still have every mobile phone he’s ever bought and his old manual typewriter I think he even has his old Amstrad stashed in a cupboard, and last time I heard about it that was still working too.
Loved my old pre-smartphone Nokias. Nothing, though, beats my old tank of an LG flip phone. Good sound quality, and the only time I hurt one was when I closed a car door on it.
I used to buy them off eBay for the kids – they groused that their friends had way cooler phones, but the LG would always work.
many good points. However, while it is true that WindowsPhone8 has not taken off in the US, it is doing well in other parts of the world, as well as the rest of this hemisphere, outselling the iPhone in some places. It is not built on the old, failed windows mobile, but is a whole new OS. Admired by The Woz.
It may actually be the best thing Microsoft has done in years, and I am no great lover of MS.
@cmorenc: a “charms bar”? I hadn’t realized Microsoft has gone all Harry Potter…
Howard Beale IV
I still have my Nokia N900, which at the time could have made a decent run-but when Nokia brought in Elop and his famous ‘burning platform’ memo, it was just a matter of the after they signed the deal with MSFT as to when Redmond would pull the trigger,
The real turning point for Microsoft in the phone spaces was ditching the old CE Kernel and moving over to the NT Kernel. When they did that they killed that very vibrant ROM-cooking chefs over at xda-developers. If you compare xda-developers from 5 years ago to today you would hardly believe that it was a heavy duty Windows Mobile community; now it’s Andriod hacks.
And to add insult to injury, not only did Microsoft go totally apeshit on locking Windows Phone down, but even Windows Phone is so glaringly deficient even as a phone. To this date, you still cannot select a customized text message alert by contact, and their current Voice Command support won’t route the voice through Bluetooth the way the old Windows Mobile version did.
Now that the die is cast, I don’t expect to see Samsung, HTC, LG, or any of the Chinese ODM’s to offer any more Windows Phone offerings.
Actually, you know what Microsoft’s best product is? Visual Studio. And I personally think that says a lot about the company. Except for the few people at the top, Microsoft is a Software Engineering company. Not a company that makes great software – though Office is pretty good even without the company’s monopolistic practices – but a company that makes an operating system and tools to help other people make great software. Remember back in the 90s when they produced a tool for just about anything you could program: Access, Foxtrot (I think that’s the right name), Visual C++, VB, and lots of other languages.
If this sounds familiar, it’s really what Google is doing right now. I just don’t get from Google that they think they can actually write software better than the people they are enabling and trying to bully them out of the market.
Windows RT (and ME) are the product of too much whiskey: http://xkcd.com/323/
I believe that the “charms bar” is the test you have to sit for if you want a job at the Ministry of Magic.
I would love Google products if they would ever offer a complete product.
Google Books are just excerpts
Google Plus is a mess
until they actually develop something, they are not much more than an info gathering firm.
@joecollege: Yeah, the overseas sales were decent, though Nokia never was able to sell many smartphones in the US market pre-Windows. It may be in part due to residual loyalty to Nokia. However, there were predictions that sales had peaked in Q2 (Q3 results aren’t out yet) so maybe that honeymoon is over. As @Howard Beale IV pointed out, there are still significant features missing from Windows Phone years into life, which is another indicator of Microsoft’s core engineering issues under Ballmer’s leadership. They have billions of cash in the bank but they don’t have enough engineers on mobile to implement voice command over a bluetooth headset?
@joecollege: Well, they do have this operating system. Maybe you’ve heard of it? And the development platform is free.
All I can say about Google Reader is that they are trying to offer as much as they can without violating copyright laws.
As for the rest of it, see my comment about Microsoft. Google is a software engineering company. For me, writing a game is more interesting than playing it, and writing the components that make a game is more interesting than writing the whole game, and developing the tools that make game development easier is even more interesting. Someone’s got to be wired that way.
Gin & Tonic
@Belafon: Are you thinking of FoxPro? MS bought that, didn’t develop it.
Full Metal Wingnut
Every single video game junkie I know has an Xbox. Some have ps3 and wii, but without fail every single serious console gamer I’ve ever known in the last decade had an Xbox. I don’t think they’ve made *that* much from Xbox even then. And even Xbox’s dominance seems ripe for picking with mobile and…wasnt their some privacy thing issue, and the next playstatkon was rumored to get a massive resurgence among console gamers against Xbox? I don’t follow that stuff.
Windows-I’ve had a Mac since 2004, but I’ve always had to run Parallels/VMWare for work-a testament to Office’s dominance. That is, until last year. I’ve been pure OS X, even for work, since early 2012 (and dual booting Linux on an old iMac). I don’t think I’ve given Microsoft any money these past two years, for the first time in a couple decades.
@Gin & Tonic: Thanks. Not entirely surprised. At the same time, though, it still fits into my comment that, at a fundamental level, they were more concerned about software development than the final products.
Howard Beale IV
@mistermix: Just a clarification: Voice Command under Windows Phone 8 works when you initiate a phone call, where it fails is when you receive a call and Voice Command announces who it is or the phone number-in the old WIndows Mobile that voice got routed to Bluetooth, under Windows Phone it comes out of the speaker.
There are some other things that are missing (like being able to ask what time it is and killing the ringer),
Gin & Tonic
@Belafon: Oh, absolutely, they’ve known all along that if you win over the developers early, you prevail in the whole ecosystem. I think that was one of the primary reasons they prevailed in the Windows-OS/2 war.
Six months ago I switched from a Nokia phone to Android. With the Nokia I had always used Outlook on my pc and the synch program between them was simple and powerful. It would add the latest contacts on both sides, and it would pop-up the duplicates and ask if I wanted to delete or merge any.
With the Android I have some program called Kies that is supposed to do the same thing, on which the drivers don’t even work half of the time and I have to reboot my pc just to even find the Android phone. The synch between Outlook and my phones numbers just does not work. To me, this seems on purpose. Google is always trying to force me into Google contacts and merging those into Google+. I don’t want to use google contacts, I don’t want to use Google+. The phone is great ( a Note 2), but from my experience if I was in business and actually needed to manage my contacts in Outlook, I would find something else.
I know of no one – no one – who is going to buy an XBone.
The secondary market for Kinect camera-coverup-coozies was already booming. Now they’ll record when you’re taking a bong hit, arguing with your wife, or beating off in exchange for the privilege of playing the latest rehash of CoD or Madden?
Presenting unverified speculation as fact is yet another demonstration of your casual relationship with the truth.
@Gin & Tonic: Agreed. And I think that you could almost mark the beginning of their stall at the point when they decided they could make the software instead of the tools.
Full Metal Wingnut
@burnspbesq: This is true. It’s an easy and tempting conclusion to jump to given reports of his strained relationship with the Board, and the fact that he should have been fired years ago, the second it was clear he underestimated mobile. Dog knows the man should have been fired. But it still doesn’t get us to the facts.
Full Metal Wingnut
Back in the day I heard tell that Gates partially stepped down for the save the world stuff, partially to keep Ballmer in the company-he was itching for the top spot and the company didn’t want to lose him. However instrumental he may have been to Microsoft in the early years, they grossly overestimated Ballmer’s importance to a post-2000 Microsoft if this is true.
@burnspbesq: He was not fired. He was told to be gone within 12 months. He was pre-tired, and not at his choosing.
In regards to the XBox, it may very well be on the downward slope as well. Even with the changes to their DRM/digital policy they are behind on preorders with the PS4, and under the current Microsoft reorganization they moved the XBox hardware division into the Devices and Studios Engineering Group, meaning that the independence that probably gave rise to the XBox’s success may very well be long gone. It depends on how the new division head treats it, and she’s quite capable of turning bad things around, but we’ll see.
Anyone here ripping the decision to buy Nokia actually *use* one of the Windows Phones (Lumia)? Go to an AT&T store and at least put it in your hand…it’s an awesome series of phones (and the 1020 – the one with the 38+3 megapixel camera – is a work of art)
@burnspbesq: I direct you to 5 USC § 7104 and following to understand Ballmer’s ouster further.
Let’s just say he was made to leave at a time not of his own choosing, and that time was recently accelerated.
@Keith P.: There’s never been an issue with the quality of Nokia hardware.The Lumia 1020 camera comes from the awesome PureView 808, which had an even bigger and better camera than the 1020. However, the 808 ran the last gasp of Nokia’s Symbian operating system, which was outmoded and clunky, so the 808 never took off (and wasn’t available in the US as far as I know).
Howard Beale IV
@Keith P.: Funny thing is the recent design language used by Nokia was a direct result of what they did for the late lamented N9, running Maemo Harmattan (later renaged to MeeGo).
I currently have a Samsung SGH-T899M as a backup/development phone-while no Nokia it’s actually quite a nice phone hardware wise and it has both a replaceable battery and LTE-but it’s been cut off at the knees from a feature standpoint in no small part due to Windows Phone 8.
Hell, even my Nokia N900 from 2009 had DLNA client support-Windows Phone 8? Nada. Zero. ZIlch. For a modern smartphone to not have DLNA client support out of the box is just simply inexcusable.
Exactly. Visual Studio revolutionized the art of writing software. But the fact that they’re a “software engineering” company has been a curse, too, because their products are written by engineers for engineers.
The biggest selling point to Apple products is that they just work, which is what the vast majority of computer users want. Just like with their cars, they don’t care what’s under the hood. They just want it to work (and look good, too) with as little hassle as possible.
Microsoft’s bread and butter continues to be in the business market. If they were smart, they would take a page from Apple, and focus on making business computers that “just work.”
Gin & Tonic
@cvstoner: Kind of tangential to your point, but in any modern business environment big enough to have an IT staff, the computers do “just work” if you’re managing your AD/Group Policy and your acquisition policies correctly.
Elop was a Trojan horse at Nokia. His sole mission was to reduce the valuation of the mobile unit to an acceptable level in preparation for the Microsoft takeover.
@Gin & Tonic:
Wait – IT staff? I know that word. Give me a second, what was it that it was termed again.
Oh. Right. “Profit sinkhole.” That’s how the CEO of the last private company that I worked for described the work that we did. And why he decided to outsource it shortly after I left to go back to academia. Man I don’t miss those days…
If you were running a business, I would hope you wouldn’t be using GMail. I would hope that you would use Google Apps for Business…which is a paid product…and includes 24 hour support, as well as remote management of mobile devices.
It also has a piece of software that you install on your computer, that will make the the Google Apps backend, appear just like an Exchange server to Outlook.
The feature is not available for the free GMail. But if you really want to use Outlook for all of your synchronization, I would suggest paying the $50/yr for a Google Apps account.
I’m not running my own business (yet), but I’ve had a Google Apps account for going on 5 years now. It really is one of the best deals in IT…$50 per year, per user.
Maybe you would prefer “forced out”?
It’s not like Ballmer was working the checkout line at WalMart, where he could just be told to clear out his locker and leave immediately. This is how CEOs of multi-billion dollar, global corporations get “fired”. He is leaving the company, against his will, at the behest of the Board of Directors.
Toe-may-toe…toe-mah-toe, it’s really just semantics.
@patrick II: Kies is not from Google, it’s Samsung’s crapware. Suggested use is as little as possible, only for system upgrades.
Commenting at Balloon Juice since 1937
Windows has the look and feel of play school toys, all primary colors. They should couple that with montone, single frequency, sounds to totally irritate all biological life forms. They have the shittiest designers on the planet and because of that, I hate their dominance. They constantly lower the public aesthetic. Now everyone can (and does) produce vast quatities of the ugliest documents known to man.
Kies is one of the most poorly written applications I’ve ever had the displeasure of using. First of all, it is HUGE…there’s no reason for an application to be that big for the functionality it provides. Secondly, it runs roughshod over Windows, and installs little bits and pieces of itself everywhere, and is damn near impossible to fully remove.
I don’t really understand what the big deal is with people using Android phones, then complaining about having to sync contacts with the GMail contacts. You have to have a Google account to use the Play Store, and you don’t “need” to activate Google Plus unless you want review an app.
Just set the account up to only sync contacts and nothing else, then you don’t have to worry about “giving all your information to Google”.
Personally, I sync everything…if you use the internet you’re being tracked. I might as well get the benefit of fully utilizing some of the awesome Google does with what it knows…like Google Now.
Especially Kies Air.
I tried it once and then promptly swore it off and uninstalled the goddamned Java from my PC.
As far as system upgrades go, I use a Sprint Galaxy S2 so I’m not holding my breath on Samsung releasing a Master Key security hole patched version of the existing 4.1.2 OS, never mind 4.2.2. or 4.3.
XDA Developers and Cyanogenmod are my friends. :)
QFT. Unfortunately, this means there’s no chance of getting that really nice hardware with a really nice smartphone OS.
So Elop was the business equivalent of a KGB sleeper?
I’m not so sure as I’ve seen articles that suggest Nokia’s previous management was pretty much driving the company into the ground without any help from Microsoft by the time Elop came on board.
Of course a lot of the same articles also state that Nokia’s big mistake was not developing Android handsets right at the start while adding features to it that went beyond the ‘skinning’ that Samsung and HTC were/are known for.
Hindsight is truly 20/20.
The prophet Nostradumbass
@patrick II: Kies is a actually Samsung thing, and a piece of garbage.
Microsoft has always had difficulty penetrating markets other than their core Windows and Office products. Their problem is both of those markets are quickly becoming commodities. MIcrosoft had huge problems getting people of of XP. Why? Because XP was good enought for what the vast majority of people do with computers. The same is true of Office.
The only way MIcrosoft could maintain their monopolies was to take advanatgae of the “network effects” of those monopolies. e.g. use Windows because everyone else does. The Internet made that mostly impossible and really opened up the world of distributed computing based on the standard Internet protocols. The rise of mobile (using freely available Unix based OSs as the kernels) really sealed the deal away from PC centric computing.
@Full Metal Wingnut:
A bunch of the early announcements re: Xbox One’s features raised big privacy and even bigger fair use issues. MS took a pummeling from the normally a$$-kissing game journalists and lots of fans.
A bunch of the most hated aspects dealt with the always on Kinect –
1) It’s always on – does that mean it can always see me?
2) It had to be able to see to connect you to the required Xbox Live*
3) Would the Kinect now be a DRM enforcement – there was speculation that the more accurate Kinect might count heads when you watch a movie and then charge you extra if over a certain number of people.
I’ve been an Xbox Live member since the start and until they said they were rolling back a lot of the worst announced aspects I was going to skip the Xbox One.
I also got burned with some of the early Xbox 360 reliability issues so I am going to wait a bit before getting an Xbox One. Available funds figure in there too…
* The must-have-XBL issue raises another point with me. I play some games online, but I think the gaming industry has too big of a focus on multiplayer. There are still lots & lots of people who don’t do any multiplayer. /rant off
@The prophet Nostradumbass: Illustrates why Samsung, despite the ravings of some, needs Google. Their software is just terrible and I don’t expect Tizen to be any better.
I wonder how long before Nokia investors realize they got screwed by the MS mole they planted in their company. He successfully devalued the company to the point MS was able to buy the company for less than the value of its patents. GENIUS!
@Belafon: They started out selling BASIC, so I guess this makes some sense.
I’ve owned iOS and Android devices and bought my first Windows Phone 6 mo ago (Samsung Ativ-S – the Nokias were way too thick and heavy and the HTC’s lacked some key features like expandable memory), and I’m a convert for sure. Now whenever I go back to Android or iOS I’m appalled at the experience vs. how useful my phone is and how many shortcomings I simply got used to with iOS/Android. Of course, I’m a business user and use it for work primarily, so your mileage may vary.
In general, this should be a great move for MSFT, but many acquisitions fail and MSFT has a worse record than some, particularly for pursuing something and then abandoning it before really giving it a chance. I’m hoping this is not the case here, especially since Nokia has always made such great PHONES and the MS ecosystem really is great for business users.
Yes, that’s right, your smartphone may be smart but it’s also a phone, and the iPhone 5 audio quality is TERRIBLE. Nokia has always made great hardware, let’s hope they keep to the same principles as MSFT employees. And thank whoever you look up and thank that they didn’t buy Blackberry as so many industry analysts were calling for….
@Full Metal Wingnut: the fact that Ballmer should have been fired so long ago points to the likely case that he wasn’t fired. Because that would be the most sensible thing to have happened, and so it doesn’t fit. I expect he will get hired by a private equity fund, because that’s the kind of thing they do. Case in point, Robert Nardelli