Another Nokia Explanation; The Same Tragic Conclusion
Another Nokia Explanation; The Same Tragic Conclusion
While I remain convinced that Microsoft’s Nokia acquisition was largely driven by fear of losing Nokia as an OEM, either to Android or bankruptcy, there is something else curious about the timing.
( The following scenario is conjecture, but not the analysis that follows)
ValueAct, who is opposed to Microsoft’s push into devices, was dissuaded from a proxy fight last Friday (the last day to file their intentions). The price? Steve Ballmer as CEO.
However, they don’t join the board for another month. And so, Ballmer and the board, fully committed to becoming a devices company, pushed through the Nokia acquisition (ValueAct had no idea ), locking in the devices and services strategy (and the reorg to a functional organization).
Shades of the old Microsoft, to say the least.
In this version of the story, Stephen Elop is almost certainly the next CEO; this telling presumes that the Nokia discussions proceeded in tandem with the reorg, with the presumption Elop would take over a functional organization in 2018, Ballmer’s original retirement date . Now that will be pulled forward.
That’s the tell, in fact. Will Elop be CEO? If my original theory is true – that Nokia was on the verge of leaving Windows Phone, either for Android or bankruptcy – then Elop simply can’t be a serious candidate.
This version of the story is, of course, much friendlier to Microsoft. It’s always better to be portrayed as being Machiavellian as opposed to being helpless. My conclusions, though, remain the same:
The tragedy in the deal, as I hinted at earlier, is that I think Microsoft ought to abandon Windows Phone. The war is over, and iOS and Android won. It would be far better for Microsoft to focus on serving and co-opting those devices , instead of shooting the most promising parts of their business in the foot for the sake of a platform that is never going to make it.
Let me elaborate on what I mean:
- The problem for Microsoft in mobile is that Android has completely destroyed the value of a licensed OS; Microsoft’s traditional software model is broken. The only way to make money is to sell hardware to a segment of the market (with lower margin percentages relative to software), or services that sit on top of OSs (with lower prices relative to software).
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