Nokia says Microsoft deal to be delayed by a month


microsoft_505_102513023351_032414044711Finnish handset maker Nokia on Monday said its $7.2 billion deal with software firm Microsoft is expected to be delayed by a month and will now be finalized by April due to pending regulatory approvals from some antitrust authorities in Asia.

The handset maker , which is facing multiple tax cases in India, added that the proceedings in the country will not affect the timing of the deal.

Last September, Nokia had announced it would sell a substantial part of its devices and services (D&S) business, including assets in India, to Microsoft for $7.2 billion by March 2014.

“It now expects the transaction whereby the company will sell substantially all of its D&S business and license its patents to Microsoft to close in April 2014,” Nokia said in a statement on Monday.

Nokia and Microsoft remain committed to the transaction, it added.

The two companies have received most of the required regulatory approvals, including clearances from the European Commission and the US Department of Justice, it said.

“However, the transaction is pending approvals from certain antitrust authorities in Asia, which are still conducting their reviews,” Nokia said.

The handset firm said it is confident the deal will close, resulting in the sale of substantially all of its D&S business to Microsoft.
Nokia reiterates that ongoing tax proceedings in India have no bearing on the timing of the closing or the material deal terms of the anticipated transaction between Nokia and Microsoft,” the Finnish firm said.

Microsoft said in a statement the completion of the deal will mark the first step to bring Microsoft and the Nokia D&S business together.

“We are nearing the final stages of our global regulatory approval process. To date we have received approvals from regulatory authorities in 15 markets on five continents.

Currently, we are awaiting approval confirmation in the final markets,” Microsoft General Counsel and Executive VP (Legal & Corporate Affairs) Brad Smith said.

This work has been progressing and the firm expects it to close next month, in April 2014, he added.

“Our acquisition will accelerate our mobile-first, cloud-first imperatives. We’re looking forward to accelerating innovation and market adoption for Windows Phones and introducing the next billion customers to Microsoft services via Nokia mobile phones,” Smith said.

Last week, in another setback for Nokia, the Tamil Nadu government slapped a Rs 2,400 crore tax demand on the company related to devices sold from its Chennai factory.

Nokia has approached the Madras High Court challenging claims made by the Tamil Nadu government.

On March 14, the Supreme Court had refused to lift a restraint on the sale of its Indian assets in a separate case related to payment of tax dues.

The apex court dismissed Nokia’s plea against a Delhi High Court order directing its parent company to give an undertaking it would fulfil the conditions related to payment of tax dues.

The apex court’s decision not to interfere with the high court order had put hurdles for Nokia transferring its Chennai plant, which is a part of the deal with Microsoft.

Nokia’s Chennai factory employs about 8,000 people, 20 per cent of them women, and about 30,000 sub-contractors.

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Will Windows 8 bring Windows Phone into focus?


Just a few days after the Windows 8 launch, Microsoft’s mobile platform gets the spotlight and some heavy support from the software giant and its partners.

A

t stake for Microsoft is its future in the world of technology and consumer electronics. While the traditional Windows software remains the company’s breadwinner, everything is going mobile, and Microsoft could slip into irrelevancy if it doesn’t catch up to the giants in the industry, Apple and Google.

With Windows 8 and Windows RT, Microsoft is attempting to move more toward mobile devices, first with laptops and “convertibles,” as well as tablets, including its own Surface. Windows Phone 8, which shares many of the same visual cues and a similar “core,” is Microsoft’s attempt to build a comparable presence in the smartphone world.”If you’re one of hundreds of millions of PC users that will use Windows 8 this year, there is no better phone for you than a Windows Phone,” Microsoft CEO Steve Ballmer said during the presentation today.

Microsoft will spare no expense promoting Windows Phone 8, tying the platform into the same family as Windows 8 and Windows RT in a massive campaign that the company hopes will drum up attention for all of its products.

Microsoft is “investing significantly in the marketing push for Windows 8, and I believe that their strategy is to exert a ‘coattail’ strategy for Windows Phone 8: drive adoption and awareness of Windows 8 in order to build familiarity and recognition among customers for Windows Phone 8,” said Charles Golvin, an analyst at Forrester Research.Indeed, Microsoft appears ready to go big with this launch.”You won’t be able to turn on a TV or open a magazine without seeing a Microsoft ad,” Ballmer boasted.Big challenges remain
Of course, it’s no guarantee that the Windows 8 love will spread to Windows Phone. In fact, there’s no guarantee that there will be any love for Windows 8 itself, with many businesses and consumers taking a cautious approach to the radical, new experience.Microsoft’s strategy may backfire on the company if consumers and businesses are slow to adopt Windows 8, which would do little to build familiarity with Windows Phone.”I see this as a risky strategy because our data indicate that it will take a long time to see broad adoption of Windows 8 and the phone and tablet markets are moving extremely quickly,” Golvin said.Companies surveyed by Forrester said they were half as likely to deploy Windows 8 than when they were asked the question about Windows 7 in 2009.

Still, Microsoft could barely do worse when it comes to the mobile end. Despite critical praise and several partners willing to build and sell smartphones running on Windows Phone, the platform hasn’t had much success over the past two years. Instead, it continues to be battered by the dominance of Apple’s iPhone and Google’s Android operating system and the myriad of high-profile smartphones that use it.

One of the challenges is its unique user interface, which includes live tiles and bold fonts in the place of a grid of app icons. Microsoft is proud of its ability to stand out from Android and iPhone, calling this the new way of using a smartphone.”We wanted to reinvent the smartphone around you,” Joe Belfiore, general manager of the Windows Phone program for Microsoft, said on multiple occasions during the presentation.But different means getting past the consumers’ perceptions and assumptions for how a smartphone works, which hasn’t always worked out so well for Microsoft and its partners.

“While there is very little wrong with the software, its design is significantly different from the current status quo of the ‘grid of apps’ user interface, and this change represents a perceived risk to potential customers,” said Ovum analyst Nick Dillon.

Nokia was supposed to spark the Windows Phone world, tapping into its cell phone know-how to build the Lumia line of smartphones; it even managed to get the backing of AT&T for its Lumia 900 this year. Unfortunately, the phone was only a moderate success.

Only further hurting the platform is that Windows Phone 7 devices won’t be getting many of the Windows Phone 8 upgrades, burning the few consumers who actually took a chance on it.

Shoring up some weaknesses
Beyond the different user interface, Windows Phone has been hamstrung by the lack of quality apps even as iOS and Android boast hundreds of thousands of apps.

Microsoft directly addressed that issue during the event. Belfiore boasted that its app store now has 120,000 apps, having grown remarkably fast in the last two years.

More importantly, 46 out of the top 50 apps will be on Windows Phone, including a new version of Twitter, UrbanSpoon, and games such as Temple Run. Next year, Windows Phone users will get Pandora with a complimentary year’s worth of ad-free service.

Belfiore also took the audience through different features such as an expanded People Hub service, as well as a demonstration of the Kids Corner feature, starring the executive’s own children.

In addition, Microsoft has worked to expand the availability of the platform, doubling its language support to 50 and tripling the number of countries that can access its app store to 191.Indeed, the company has done a lot of work to make Windows Phone 8 as attractive as possible, and appears to have the support of key partners such as handset manufacturers and carriers. Ballmer himself used a Lumia 920 from Nokia, while Belfiore used a Windows Phone 8X device from HTC.

“With Nokia trying to break in with the Lumia series, and other major handset vendors looking to Windows Phone 8 to provide an alternative to Android, Windows Phone 8 should come into its own in 2013,” said Soumen Ganguly, a consultant for Altman Vilandrie.

Now Microsoft just needs to get the consumers to start paying attention. The recent history of Windows Phone has shown that always hasn’t been so easy.

Future of Nokia hangs on Windows Phone 8 rollout


For Nokia, it comes down to this: Is Microsoft’s new phone software going to get it back in the smartphone race, or is it going to be too late?

After being the top seller of cellphones in the world for 14 years, Nokia failed to meet the challenge when Apple in 2007 introduced the dazzling iPhone that caught the imagination of design-conscious customers and rattled mobile markets.

Photo: AP Microsoft CEO Steve Ballmer gives his presentation at the launch of Microsoft Windows 8, in New York, Thursday, Oct. 25, 2012. Windows 8 is the most dramatic overhaul of the personal computer market’s dominant operating system in 17 years.

The Finnish company hit a downward spiral that has led to shrinking sales and market share, plant closures, thousands of layoffs and downgrades by credit agencies to junk status. On Friday, research firm IDC said that in the July-to-September period, Nokia slid for the first time off the list of the top five smartphone makers in the world. It’s still the second-largest maker of phones overall, but sales of non-smartphones are shrinking across the industry, and there’s little profit there.

The ailing company’s CEO, Stephen Elop, sees Microsoft’s new Windows Phone 8 software as a chance to reverse that trend, describing it as a catalyst for the new models. On Monday, Microsoft Corp. is hosting a big launch event for the software at an arena in San Francisco. The first phones from Nokia, Samsung and HTC are expected to hit store shelves next month.

The launch of Windows Phone 8 follows on the heels of Windows 8 for PCs and tablets, which Microsoft released Friday. That operating system has borrowed its look from Windows Phone, meaning Microsoft now has a unified look across PCs and phones — at least if people take to Windows 8. The company has also made it easy for developers to create software that runs on both platforms with minor modifications.

Analysts are calling this a make-or-break moment for Nokia. “Nokia is placing a huge bet on Microsoft and if the gamble doesn’t pay off, the losses can be high,” said Neil Mawston from Strategy Analytics, near London. “It’s putting all its eggs in one basket and that’s quite a high-risk strategy.”

In February last year, Nokia announced it was teaming up with Microsoft to replace its old Symbian and next-generation MeeGo software platforms with Windows. This move was made in the hope that it would rejuvenate the company and claw back lost ground.

Eight months later, they produced the first Nokia Windows Phone. Consumers didn’t warm to it, and it soon became clear that these phones, based on Windows Phone 7, were going to become obsolete. They can’t be upgraded to Windows Phone 8. Lumia sales slumped to 2.9 million units in the third quarter after reaching 4 million in the previous three months.

“Retailers withdrew marketing and promotion because no one wants to sell customers a device that ages in a few months,” says Michael Schroeder, analyst at FIM Bank Ltd. in Helsinki. “Had there been a seamless transfer to Windows 8 from the old (Lumia) devices, sales figures would have been much higher last quarter.”

Mawston gives Nokia until April to prove it’s still in the race. “If Nokia does not have more than 5 percent of the global smartphone market by the end of the first quarter 2013, alarm bells will be ringing,” Mawston said.

Analysts estimate Nokia’s current global smartphone market share to be some 4 percent — down from 14 percent a year ago. Meanwhile, uncertainty clouds its new venture with Microsoft. “We’re a bit in the dark here,” Schroeder said. “Right now we can’t really say anything about Nokia’s future. Everything depends on how the new devices are received in the market.”

Nokia says its Lumia 920 and 820 phones are just the beginning of a new range of Windows Phone 8 devices, but early evaluations suggest they lack the “wow” effect necessary to make a dent in the smartphone market.

Also, Windows Phone 8 lags behind in the number of third-party applications available. There are some 100,000 available. Google’s and Apple’s stores have six or seven times as many. “It’s a perception thing really,” Mawston of Strategy Analytics said. “Like in supermarket wars, if you have a store with lots of shelves with lots of apps, then consumers will choose you over a smaller store that has a smaller offering — even if you can’t use all those apps.”

Analysts expect 700 million smartphones to be sold worldwide this year. While network operators and retailers may welcome a third software system to challenge the dominance of Apple’s iOS and Google’s Android, it is the consumer who will ultimately decide Nokia’s and Windows Phone 8’s fate.

Beside the smartphone challenge, Nokia is feeling the pinch in the lower end with manufacturers in China and in Asia producing cut-rate non-smartphones — Nokia’s former domain. Earlier this year, Samsung overtook it as the world’s No. 1 mobile phone vendor, ending Nokia’s reign that peaked in 2008 with a 40 percent market share.

“Dumb” phones continue to be the backbone of Nokia operations, including in India where it’s a top seller. With strong and extensive distribution networks and a brand well-known in emerging markets, all might not be lost for the company that grew from making paper and rubber boots to being the biggest manufacturer of cellphones.

Mawston says that in theory, Nokia and Microsoft have a good chance of success as they offer an across-the-board system that stretches across home computers, mobiles, laptops, tablets as well as in the office, backed by Nokia’s strong distribution and hardware and Microsoft’s multi-platform software.

“If they can exploit that underlying market platform … and tie it all together in a good hardware portfolio, then potentially Microsoft and Nokia could be a very, very strong partnership — a bit like bringing together Batman and Robin,” Mawston said. “But, in practice, whether they can execute on that reality still is a great unknown and remains to be seen.”