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August 15th, 2013, Vol:1

Editor's Words

By Sridhar Pai, ceo, Tonse Telecom


Mighty Fall of the 'Brick' ? - Nokia-Microsoft Deal

Finnish mobile phone maker Nokia, once the world's biggest seller of mobile phones, has announced that it will sell substantially all of its mobile unit and services segment to tech giant Microsoft for a whopping $7.17 billion dollars.

Microsoft is buying the majority of Nokia's cell phone unit for $5 billion, and spending another $2.18 billion to license Nokia's patent portfolio, for a total of $7.17 billion.

As a part of the deal, Nokia will grant Microsoft a 10-year non-exclusive license to its patents and will itself focus on network infrastructure and service.

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Drop us a line - stpai@tonsetelecom.com
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Drop us a line - stpai@tonsetelecom.com

"In addition to their innovation and strength in phones at all price points, Nokia brings proven capability and talent in critical areas such as hardware design and engineering, supply chain and manufacturing management, and hardware sales, marketing and distribution." said Steve Ballmer, Microsoft chief executive officer.

The mobile revolution, which has produced front-runners, like Apple and Samsung have pushed Nokia from the top spot and the fall of Nokia has been fairly rapid coinciding with the extensive growth of smartphones.

Nokia failed to adapt quickly enough to market changes, starting to become the Dell of handsets.

Nokia took the top spot in 1998 from Motorola, but lost its ground in the first quarter of 2012 when Samsung shipped 93 million phones compared to about 83 million by Nokia, according to research firm Strategy Analytics.

Samsung overtook Nokia to become the world's largest maker of mobile phones. According to GfK-Nielsen's data, In India, Samsung's volume market share in urban areas in March rose to 31.4%, exceeding Nokia's 30.1%.

Back in 2011, Nokia partnered with Microsoft in an effort to beat off competition and recoup some of the lost ground to iPhone and Android-based devices. The company tried to make a combative push in smartphones to stay a leader and fought back to win market share from iPhone and Samsung with its Lumia smartphones.

The Finnish maker's bold strategy to switch to Microsoft's Windows Phone operating system for its smartphones clearly did not go too well.

Nokia Lumia 900, the company's flagship smartphone for the American market was also hit by software glitches and bugs. Although the glitch was a trivial setback to the company but it was seen as vital as it was Nokia's turnaround plan. The company had dumped its own smartphone operating systems to work wholly with Microsoft on Windows Phone devices.

Nokia was visibly frustrated with the app situation for Windows Phone devices. Nokia vice president Bryan Biniak said in July, "As a company we don't want to rely on somebody else and sit and wait for them to get it right."

The company has been coming out with new devices steadily since Windows Phone 8 came out in the market in November 2012, but the lack of apps and software updates has always been the weak point.
The Windows Phone Store currently has 165,000 apps, compared to the 900,000 or more in the Apple App Store, and the million apps in the Google Play shop.

Nokia was on a downward spiral with falling handset sales, widening loss quarter after quarter and non-lucrative Windows store, leaving it with the best option to sell itself.
With the acquisition of Nokia, Microsoft has made it clear that it is holding onto Windows OS and moving into direct competition with its partners.

Microsoft's vice president of operating systems, Terry Myerson said "Our OS group mission is to enable the innovations of our hardware partners to shine through on the Windows platform."

Microsoft is not just a software company but it has transitioned itself into a manufacturer.

Although Nokia CEO Stephen Elop's bold bet in 2011 to embrace Windows OS did not turn out to be rewarding to the Finnish maker, but now the acquisition by Microsoft will certainly have a huge impact in the tech world

Sandhya Vijayan, researcher with Tonse Telecom, covers social media.

Huawei, ZTE win bulk of China Mobile's $3 billion 4G tender
Shenzhen-based Huawei and crosstown rival ZTE have obtained about 25 percent each of the total 4G procurement in China Mobile's tender this year, said the sources, who are familiar with the negotiations but declined to be identified because they are not authorized to speak to the media.
European vendors Ericsson, Alcatel-Lucent SA and Nokia Siemens Networks (NSN) have obtained a share of around 10 percent each, the sources said. more here
Google Capital joins Yahoo, Microsoft in race to buy Tikona stake
Google Capital, owned by internet search engine Google, is in race to buy a stake in Mumbai-based broadband service provider Tikona Digital Networks (TDN), joining rivals Yahoo and Microsoft Corporation, which have also evinced interest in the five-year old company that is seeking capital to roll out the fourth-generation or 4G network across five states. The US-based fund, which invests in late-stage companies, had done a technical and financial due diligence on TDN last month. CLSA Capital Partners is advising TDN. The broadband service provider has been in talks with funds for the past few months and is now in talks with an investor who brings "strategic value" to the company. more here
WeChat hits 100m registered accounts outside China

Owned by China's Tencent, WeChat, a smartphone-based social messaging app, is gaining users at an astonishing rate. Last month, in July, the company announced that it had reached the 70 million milestone of users outside of mainland China.
Since then, the company has increased its user base by another 30 million users to hit the 100 million mark. The company says its rapid growth is partly due to its recent 5.0 upgrade and having famous football star, Lionel Messi, endorse the social messaging service. more here

Time may be running out for Cablevision Systems Corp. (CVC) to find a buyer
With its highest valuation in two years, the $4.8 billion cable operator founded four decades ago by Charles Dolan should take advantage of a surge in cable matchmaking to sell, according to Macquarie Group Ltd. Bethpage, New York-based Cablevision jumped 42 percent in just eight weeks as speculation heated up about deals in the industry and shareholders Paulson & Co. and Gamco Investors Inc. said a sale is likely. more here
Amazon Is Said to Have Tested a Wireless Network
Amazon.com Inc. has tested a new wireless network that would allow customers to connect its devices to the Internet, according to people with knowledge of the matter.
The wireless network, which was tested in Cupertino, California, used spectrum controlled by satellite communications company Globalstar Inc. (GSAT). more here

About Tonse Telecom

Tonse Telecom is a research, consulting and advisory services organization focusing on the India telecom sector. Tonse Telecom enables telecom equipment vendors, ISVs, infrastructure developers and investors for success in the Indian telecom marketplace.

Tonse Telecom has onboard, a team of reputed senior industry executives and consultants who provide advisory services on specific projects. Tonse covers a broad spectrum of telecom technologies that include 3G, Wi-Fi /BWA, IMS, FMC and Triple Play, VoIP, Mobile VAS, End-device Applications and Mobile Content.

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