Katie MarsalAccording to The Associated Press, Nokia Chief Executive Stephen Elop revealed at this week's Mobile World Congress that Microsoft is paying the Finnish handset maker billions of dollars to switch to Windows Phone. Elop revealed the agreement in an effort to appease investors, after his company's stock tumbled 14 percent following the announced partnership with Microsoft.
The CEO said Microsoft's payments acknowledge the "substantial value to contribute" that Nokia offers the Redmond, Wash., software giant. He also said that his company will pay Microsoft royalties for the use of its software, as is standard practice.
Elop was also asked if he's a "Trojan horse" for Microsoft, his former employer, to which he replied "No." He said the decision to adopt the Windows Phone platform was unanimous among Nokia's senior management.
Nokia announced last week that it plans to ditch its Symbian operating system for future smartphones and will instead focus on creating new handsets running Microsoft's Windows Phone platform. Through the partnership, in which the two will "integrate key assets," the companies said they plan to introduce a "new global mobile ecosystem" by jointly creating new mobile products and services.
Nokia went on to reveal on Monday it plans to release its first handsets running the Windows Phone platform this year. Elop said that his company is "feeling the heat" to meet a 2011 deadline.
Elop, previously the head of Microsoft's Business Division, took over as CEO of Nokia in September of 2010. Nokia has struggled to maintain its dominance in the smartphone market as competitors Apple and Google have found great success.
Elop candidly acknowledged those struggles in a 1,300-word letter to employees issued this month. In it, he compared the company's Symbian mobile operating system to a "burning platform" that the company was forced to jump off of in order to survive.
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60 Comments
This story has already been corrected in the press. The actual story is that Nokia will save billions by adopting Windows Phone.
A marriage made in hell.
Apparently when you leave your job at microsoft you have a big "MORON" tattooed to your forehead as you have no real clue how to run a non-monopoly business. Why in the world would you announce this joint effort to the world up to a year before you can actually implement it in new devices, and before you've had time to effectively prepare/ transition your huge installed user base? Nothing says "abandon my brand" like "I'm going to dump the OS you are now using, because it has no future and I sold you crap, and we will not have something new to replace it for you for the next 12 months or so!"
This is why Apple has such tight security on info leaks on new products et al. (Remember the intel switch that went so smoothly after it wasn't announced until products were actually ready for sale.) It is a competitive advantage to keep secrets and protect the existing business - sell what you have. Now all loyal Nokia users have been told / given permission to look for something else that is better because what they are using has no future. And that something new and better most certainly won't be MSFT/Nokia handsets. ROFLOL at this one.
I think Microsoft should should just buy out Nokia already, get even more in savings and keep it all in-house.
This JV thing will simply drag on, with lots of buck-passing and no clear outcomes.....
A marriage made in hell.
Apparently when you leave your job at microsoft you have a big "MORON" tattooed to your forehead as you have no real clue how to run a non-monopoly business. Why in the world would you announce this joint effort to the world up to a year before you can actually implement it in new devices, and before you've had time to effectively prepare/ transition your huge installed user base? Nothing says "abandon my brand" like "I'm going to dump the OS you are now using, because it has no future and I sold you crap, and we will not have something new to replace it for you for the next 12 months or so!"
This is why Apple has such tight security on info leaks on new products et al. (Remember the intel switch that went so smoothly after it wasn't announced until products were actually ready for sale.) It is a competitive advantage to keep secrets and protect the existing business - sell what you have. Now all loyal Nokia users have been told / given permission to look for something else that is better because what they are using has no future. And that something new and better most certainly won't be MSFT/Nokia handsets. ROFLOL at this one.
I love this. It is an excellent point. The head of Nokia has basically told everyone thinking of buying a Nokia phone not to buy a Nokia phone because they run a rubbish OS. Nice one Elop. I am really looking forward to this going totally wrong.
My take away from this is that the US really has the best software engineers in the world if what MS has to offer is still better than Nokia's own in-house alternatives.
Now let's sit back and watch as the US policy of favoring Wall Street fat cats above everyone else eventually throws this critical industry away too.