Microsoft Mobile

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Not to be confused with Microsoft Mobile Services, Microsoft Office Mobile, or Windows Mobile.
Microsoft Mobile
Osakeyhtiö
(Limited company)
Industry Telecommunications equipment
Predecessor Nokia Devices and Services division
Founded Keilaniemi, Espoo, Finland (25 April 2014)
Headquarters Espoo, Finland
Area served
 Worldwide
Key people
 Stephen Elop
Jo Harlow
Products Mobile Phones
Smartphones
Tablets
Parent Microsoft Corporation
Website Microsoft Mobile Devices

Microsoft Mobile is a multinational mobile phone and mobile computing device manufacturing company headquartered in Espoo, Finland, and a wholly owned subsidiary of Microsoft. Its principal activity is the design, development, manufacture and distribution of mobile phones, smartphones, tablet computers and related accessories.

Microsoft Mobile was established following the acquisition of Nokia's Devices and Services division by Microsoft, which was completed in April 2014. While Microsoft retains a limited license to use the Nokia name and logo on feature phones, the company was only granted a transitional license to the Nokia brand name.

Microsoft Mobile got the right to sell mobile phones under the Nokia brand name as part of a 10-year licensing agreement, as long as those phones are based on the S30 which comprises feature phones. Future "Lumia" smartphones fell out of this license and couldn't be released bearing the Nokia brand;[1] [2] In October 2014, it was announced that future Lumia devices would carry the Microsoft name and logo instead of Nokia.

Microsoft Mobile is Microsoft's second venture in the mobile phone hardware business, following the short-lived Kin in 2010.

History[edit]

With the acquisition of Nokia's devices and services division, Microsoft re-entered the smartphone market after its previous attempt, Microsoft Kin, a result of their acquisition of Danger Inc., was poorly-received.[3]

2011: Alliance with Nokia, Windows Phone, and launch of Lumia[edit]

The Nokia Lumia 720

In February 2011, Stephen Elop and Microsoft's CEO Steve Ballmer jointly announced a major business partnership between the two companies, which would see Nokia adopt Windows Phone as its primary platform on future smartphones, replacing both Symbian and MeeGo. The deal also included the use of Bing as the search engine on Nokia devices, and the integration of Nokia Maps into Microsoft's own mapping services.[4] Nokia announced that it would still release one device running the MeeGo platform in 2011, but that it would devote fewer resources to future development of the platform, and that it would phase out Symbian entirely.[4] Aligning with Microsoft had been considered a possibility by analysts due to Elop's prior employment with the company.[5][6][7] Nokia unveiled its first Windows Phone 7-based devices, the mid-range Lumia 710 and high-end Lumia 800, on 26 October 2011 at its Nokia World conference.[8][9]

After this announcement, Nokia's share price fell about 14%, its biggest drop since July 2009.[10] Nokia's smartphone sales, which had previously increased, collapsed.[11] From the beginning of 2011 until 2013, Nokia fell from #1 to #10 in smartphone sales.[12] Amid falling sales, Nokia posted a loss of 368 million euros for Q2 2011, while in Q2 2010 realized a profit of 227 million euros. On September 2011, Nokia has announced it will end another 3,500 jobs worldwide, including the closure of its Cluj factory in Romania.[13]

As Nokia was the largest mobile phone and smartphone manufacturer worldwide at the time,[14] it was suggested the alliance would help Windows Phone.[7] Nokia was overtaken by Apple as the world's biggest smartphone maker by volume in June 2011.[15] [16] In August 2011 Chris Weber, head of Nokia's subsidiary in the U.S., stated "The reality is if we are not successful with Windows Phone, it doesn't matter what we do (elsewhere)." He further added "North America is a priority for Nokia (...) because it is a key market for Microsoft.".[17]

Nokia reported "well above 1 million" sales for its Lumia line up to 26 January 2012,[18][19] 2 million sales for the first quarter of 2012,[20] and 4 million for the second quarter of 2012.[21] In this quarter, Nokia only sold 600,000 smartphones (Symbian and Windows Phone 7) in North America.[22] For comparison, Nokia sold more than 30 million Symbian devices world-wide in Q4 2010[23] and the Nokia N8 alone sold almost 4 million in its first quarter. In Q2 2012, 26 million iPhones and 105 million Android phones shipped, compared to only 6.8 million devices with Symbian and 5.4 million with Windows Phone.[24]

While announcing an alliance with Groupon, Elop declared "The competition... is not with other device manufacturers, it's with Google."[25]

In June 2012, Nokia chairman Risto Siilasmaa told journalists that Nokia had a contingency plan in the event that Windows Phone failed, but did not specify what it was.[26][27]

2012: Financial difficulties[edit]

Market share of Symbian, Windows Mobile and Windows Phone 7 among US smartphone owners from Q1 2011 to Q2 2012 according to Nielsen Company.

On 8 February 2012, Nokia Corp. announced 4,000 layoffs at smartphone manufacturing plants in Europe by the end of 2012 to move assembly closer to component suppliers in Asia.[28]

On 14 June 2012, Nokia announced 10,000 layoffs globally by the end of 2013[29] and shut production and research sites in Finland, Germany and Canada in line with continuing losses and the stock price falling to its lowest point since 1996.[30]

In total, Nokia laid off 24,500 employees by the end of 2013.[31]

On 18 June 2012, Moody's downgraded Nokia's bond rating to junk.[32] Nokia CEO admitted that the company's inability to foresee rapid changes in the mobile phone industry was one of the major reasons for the problems.[33]

On 4 May 2012, a group of Nokia investors filed a class action against the company as a result of disappointing sales.[34] On 22 August 2012, it was reported that a group of Finnish Nokia investors were considering gathering signatures for the removal of Elop as CEO.[35]

In December 2012, Nokia announced that it would be selling its headquarters Nokia House for €170 million, and leasing it back in the long-term. This decision was taken to slash costs as the company was during a financial crisis of falling revenues.[36]

2013: New products and lack of profits[edit]

In January 2013, Nokia reported 6.6 million smartphone sales for Q4 2012 consisting of 2.2 million Symbian and 4.4 million sales of Lumia devices (Windows Phone 7 and 8).[37] In North America, only 700,000 mobile phones have been sold including smartphones.

In May 2013 Nokia released the Asha platform for its low-end borderline smartphone devices. The Verge commented that this may be a recognition on the part of Nokia that they are unable to move Windows Phone into the bottom end of smartphone devices fast enough and may be "hedging their commitment" to the Windows Phone platform.[38]

In the same month, Nokia announced its partnership with the world's largest cellular operator China Mobile to offer Nokia's new Windows-based phone, the Lumia 920, as Lumia 920T, an exclusive Chinese variant. The partnership was a bid by Nokia to connect with China Mobile's 700 million-person customer base.[39]

Following the second quarter of 2013, Nokia made an operating loss of €115m (£98.8m), with revenues falling 24% to €5.7bn, despite sales figures for the Lumia exceeding those of BlackBerry's handsets during the same period. Over the nine-quarters prior to the second quarter of 2013, Nokia sustained €4.1 billion worth of operating losses. The company experienced particular problems in both China and the U.S.; in the former, Nokia's handset revenues are the lowest since 2002, while in the U.S., Francisco Jeronimo, analyst for research company IDC, stated: "Nokia continues to show no signs of recovery in the US market. High investments, high expectations, low results."[40]

In July 2013, Nokia announced that Lumia sales were 7.4 million for the second quarter of the year – a record high.[41]

2013: Acquisition of Nokia's mobile phone business[edit]

On 2 September 2013, Microsoft announced that it would acquire Nokia's mobile device business in a deal worth €3.79bn, along with another €1.65bn to license Nokia's portfolio of patents for 10 years; a deal totaling at over €5.4bn. Steve Ballmer considered the purchase to be a "bold step into the future" for both companies, primarily as a result of its recent collaboration. It was also part of Ballmer's long-term vision of transforming Microsoft into a 'devices and services' company. Pending regulatory approval, the acquisition was originally expected to close in early 2014.

In an interview with Helsingin Sanomat, former Nokia executive Anssi Vanjoki commented that the Microsoft deal was "inevitable" due to the "failed strategy" of Stephen Elop.[42]

In March 2014, it was announced that the acquisition of Nokia's mobile phone business would not be completed by the end of March as expected, but instead was delayed until April of that year due to problems with regulators in Asia.[43] The acquisition of Nokia's mobile phones business by Microsoft was closed on 25 April 2014 for "slightly more" than the originally stated €5.44 billion.[44] Nokia's mobile phone assets became a part of Microsoft Mobile, a new subsidiary of Microsoft based in Finland.[45][46]

While Microsoft licensed the Nokia brand under a 10-year agreement, Nokia agreed not to use its name on smartphones and will be subject to a non-compete clause preventing it from producing any mobile devices under the Nokia name through 31 December 2015. Microsoft acquired the Asha and Lumia brands as part of the deal, and are also licensing the Nokia brand from Nokia.[47]

As part of the deal, a number of Nokia executives joined Microsoft. Stephen Elop became the head of Microsoft's devices team (which include products such as Xbox and Surface); Risto Siilasmaa replaced Elop as interim CEO, before the appointment of Rajeev Suri.[48][49][50][51]

On 17 July 2014, it was reported that a major round of layoffs, a total of over 18,000 across the entire company, would occur at Microsoft over the next year. The majority of this layoffs will be in relation to the integration of Nokia's former staff into Microsoft, in an effort to reduce redundancy. It was also reported that Microsoft had ended future development of Nokia's feature phone and X lines in favor of focusing exclusively on Windows Phone.[52][53]

2014: Post-acquisition[edit]

In September 2014, Microsoft announced Windows 10 operating system, a common platform for smartphones, tablets, laptops and Xbox.[54] Windows 10 is expected to be available in late 2015.

In October 2014, Microsoft announced that future Lumia devices would be branded with the Microsoft name and logo rather than Nokia.[55] In November 2014, Microsoft announced its first self branded phone, Microsoft Lumia 535. [56]

Products[edit]

Lumia[edit]

Main article: Microsoft Lumia
Nokia Lumia 1020 with 41 MP rear camera using Nokia's PureView technology.

The Lumia is a line of touchscreen smartphones and tablet computers, introduced in November 2011. They all run on the Windows Phone operating system. It was originally a smartphone line until the introduction of the Lumia 2520 in November 2013, which extended the line into tablet PCs. The Lumia is Microsoft's flagship portfolio.

X[edit]

Main article: Nokia X family
The Nokia X

The Nokia X family was unveiled at Mobile World Congress in February 2014 in Barcelona, Spain. These devices, which are aimed towards emerging markets, run a modified version of Android known as Nokia X Software Platform, which is aligned towards Microsoft services and does not use Google Play Store.

Feature phones[edit]

Main articles: Series 30 and Series 30+
The Nokia 130, which runs on the Series 30 platform.

These devices have T9-keypads and do not have touchscreens. After superseding higher end feature phones running Series 40 and the Asha Platform with Windows Phones, Microsoft continues to produce Series 30 and Series 30+ based feature phones. These devices are aimed at first-time mobile phone users.

Software[edit]

Main articles: Windows Phone and Windows 10

Windows Phone (WP) is a mobile operating system developed for smartphones as the replacement successor to Windows Mobile.[57][58]Windows Phone features a new user interface derived from the Microsoft-developed "Modern" design language (formerly known as "Metro").[59] Unlike Windows Mobile, it is primarily aimed at the consumer market rather than the enterprise market.[60] It was first launched in October 2010 with Windows Phone 7.[61] Windows Phone 8.1 is the latest public release of the operating system, and was delivered in final form to developers on April 14 2014. It is available for update to all devices previously running Windows Phone 8.[62][63]

Windows 10 was unveiled on September 30, 2014 as a successor to Windows 8.1, it is scheduled to be released in 2015, and is currently in public beta testing. First presented in April 2014 at the Build Conference, Windows 10 aims to address shortcomings in the user interface introduced by Windows 8 by improving the user experience for non-touchscreen devices (such as desktop computers and laptops), including a revival of the desktop Start menu seen in Windows 7, a virtual desktop system, and the ability to run Windows Store apps within windows on the desktop as well as in full-screen mode. Windows 10 will also mark the culmination of a plan by Microsoft to unify the Windows, Windows Phone, and Windows Embedded product families around a common internal core.

Corporate affairs[edit]

[edit]

Main article: Microsoft § Logo

On August 23, 2012, Microsoft unveiled a new corporate logo at the opening of its 23rd Microsoft store in Boston indicating the company's shift of focus from the classic style to the tile-centric modern interface which it uses/will use on the Windows Phone platform, Xbox 360, Windows 8 and the upcoming Office Suites.[64] The new logo also includes four squares with the colors of the then-current Windows logo which have been used to represent Microsoft's four major products: Windows (blue), Office (red), Xbox (green), and Bing (yellow).[65] However this logo is not completely new—it was featured in Windows 95 commercials from the mid-1990s.[66][67]

  • 2012–present

Headquarters[edit]

Main article: Microsoft Talo
Microsoft Talo

The Microsoft Talo is the head office building of Microsoft Mobile (formerly part of the Nokia Corporation), located in Keilaniemi, Espoo, just outside Helsinki, the capital of Finland.

The building was previously named The Nokia House. The two most southern parts of the building were built in the early 1990s and the third most northern part was built in 2000. Around 5000 employees work in the premises.

On December 2012, Nokia announced that it has sold its head office building to Finland based Exilion for €170 million and leasing it on a long term basis.[68]

After the completion of Microsoft's acquisition of Nokia's device business in April 2014, the building received its new name: Microsoft Talo. [69][70]

See also[edit]

References[edit]

  1. ^ http://www.marketingweek.co.uk/sectors/technology-and-telecoms/news/microsoft-completes-nokia-acquisition/4010292.article
  2. ^ http://betanews.com/2014/04/25/nokias-devices-services-business-now-in-microsofts-hands/
  3. ^ "Notify The Next Of Kin". InformationWeek. 30 June 2010. 
  4. ^ a b "Nokia and Microsoft form partnership". BBC. 11 February 2011. Retrieved 12 February 2011. 
  5. ^ Weintraub, Seth (2011-02-08). "Nokia's Elop drops bomb: the platform is on fire". Fortune. Retrieved 2013-06-14. 
  6. ^ John, Michael. "Microsoft announces Lumia". Cellz. Cellz. Retrieved 13 November 2014. 
  7. ^ a b "Capitulation: Nokia adopts Windows Phone 7". =Ars Technica. 11 February 2011. Retrieved 12 February 2011. 
  8. ^ "Nokia Lumia 710 hands-on (video)". Engadget. Retrieved 2012-11-08. 
  9. ^ Toor, Amar (2011-10-26). "Nokia announces the Lumia 800". Engadget. Retrieved 13 November 2012. 
  10. ^ ben-Aaron, Diana (11 February 2011). "Nokia Falls Most Since July 2009 After Microsoft Deal". Bloomberg. 
  11. ^ "Lumia: Is the light visible?". Asymco. Horace Dediu. 18 April 2013. Retrieved 21 July 2013. 
  12. ^ "Gartner Says Asia/Pacific Led Worldwide Mobile Phone Sales to Growth in First Quarter of 2013" (Press release). Gartner. Gartner, Inc. 14 May 2013. Retrieved 21 July 2013. 
  13. ^ "Nokia to cut 3500 jobs worldwide; to shut Romania factory". 29 September 2011. 
  14. ^ "Gartner Says Sales of Mobile Devices in Second Quarter of 2011 Grew 16.5 Percent Year-on-Year; Smartphone Sales Grew 74 Percent" (Press release). Gartner. 11 August 2011. Retrieved 29 September 2011. 
  15. ^ Ward, Andrew (21 July 2011). "Apple overtakes Nokia in smartphone stakes". Financial Times. Retrieved 21 July 2011. 
  16. ^ "Recent Smartphone Shipments show Gainers & Losers". Retrieved 22 August 2012. 
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  18. ^ "Nokia Q4 2011 net sales EUR 10.0 billion, non-IFRS EPS EUR 0.06 (reported EPS EUR −0.29) Nokia 2011 net sales EUR 38.7 billion, non-IFRS EPS EUR 0.29 (reported EPS EUR −0.31)". Nokia. 26 January 2012. Retrieved 22 June 2013. 
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  32. ^ "Nokia Downgraded to Junk". Zacks.com. 2012-06-18. Retrieved 2013-09-08. 
  33. ^ "Nokia CEO Stephen Elop admits failure to foresee fast-changing industry". 28 June 2012. [dead link]
  34. ^ Reisinger, Don (2012-05-04). "Nokia, execs hit with class-action suit over disappointing Lumia sales | Mobile – CNET News". News.cnet.com. Retrieved 2013-09-08. 
  35. ^ "Nokia Finnish investors considering gathering signatures to get CEO Elop sacked". Phonearena.com. Retrieved 2013-09-08. 
  36. ^ "Struggling Nokia sells HQ". 3 News NZ. 5 December 2012. 
  37. ^ "Nokia Corporation Q4 and full year 2012 Interim Report". 
  38. ^ Savov, Vlad (9 May 2013). "Nokia hedges its commitment to Windows Phone with new Asha platform and $99 phone". The Verge. Retrieved 22 June 2013. 
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  42. ^ "Nokian ex-pomo Anssi Vanjoki: Häpeällistä mutta väistämätöntä". Helsingin Sanomat (in Finnish). Retrieved 4 September 2013. 
  43. ^ DELAYED: Microsoft Won't Close Its $7.2 Billion Buy Of Nokia Until April, Business Insider, March 24, 2014
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  54. ^ Announcing Windows 10
  55. ^ Warren, Tom (21 October 2014). "Microsoft Lumia will replace the Nokia brand". The Verge. Retrieved Oct 21, 2014. 
  56. ^ High five for Microsoft Lumia 535
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  59. ^ Chacos, Brad (April 10, 2012). "Microsoft Now Calling It’s Windows 8 Metro Interface "Modern UI"". LAPTOP. Retrieved 2013-06-113.  Check date values in: |accessdate= (help)
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  62. ^ Microsoft Unveils Phone Software With Rival to Apple’s Siri, Bloomberg, April 2, 2014
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  65. ^ Eric, Steven H. (August 23, 2012). "NEW MICROSOFT LOGO REVEALED". Flapship.com. Retrieved August 23, 2012. 
  66. ^ "Microsoft's new logo has ties to the past". 
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  68. ^ "Official: Nokia to sell and lease back of Nokia House". InfaTech. December 4, 2012. 
  69. ^ Nokia House now has Microsoft Branding
  70. ^ Microsoft Talo

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