Nokia is to buy France’s Alcatel-Lucent in a €15.6 billion ($17 billion) takeover deal.
Under the all-share deal, Alcatel-Lucent shareholders will own 33.5% of the new combined company, and Nokia shareholders 66.5%.
Both companies said their boards had agreed the takeover and they expected it to go through in the first half of 2016.
The merger will form a European telecoms equipment group worth more than €40 billion.
Nokia CEO Rajeev Suri said the companies’ complementary technologies would give them “the scale to lead in every area in which we choose to compete”.
Photo Reuters
“I firmly believe that this is the right deal, with the right logic, at the right time,” Rajeev Suri said.
Nokia and Alcatel-Lucent are currently among the weakest players in the telecoms equipment industry. However, the combined company will have a market share of 35%, making it second only to Swedish rival Ericsson, which has 40%, according to Bernstein Research.
The companies expect the merger to cut operating costs by €900 million by 2019, but Nokia said it would not cut jobs beyond what Alcatel had already planned.
“No job cuts” in France was the condition under which the French government said on April 14 that it would back the deal.
Alcatel-Lucent’s shares fell 10% in early trading, with traders attributing the fall to shareholders’ disappointment that the deal did not have a cash element.
However, Nokia’s shares rose almost 5%, despite some analysts saying that the deal could take a long time to pay off.
Microsoft has reported a decline in its profits as a result of costs related to job cuts and its purchase of Nokia’s smartphone business earlier this year.
However, the tech giant reported higher-than-expected quarterly revenue, helped by stronger sales of its phones, Surface tablets and cloud-computing products for companies, while keeping its profit margins largely intact.
Microsoft made $4.5 billion in Q3 2014, 13% lower than the same time last year.
“Integrations and restructuring expenses” cost $1.1 billion, Microsoft said.
However, the new Nokia business also boosted revenues. They climbed 25% to $23.2 billion, beating expectations and sending shares higher in after-hours trading.
In July Microsoft announced plans to cut 18,000 jobs, including 12,500 in the Nokia unit it bought in April.
On October 22 Microsoft said it would no longer use the Nokia name, selling future Lumia smartphone models as Microsoft-branded phones.
Microsoft made $4.5 billion in Q3 2014, 13 percent lower than the same time last year
Microsoft CEO Satya Nadella said the company was being “positioned for future growth”.
“Our teams are delivering on our core focus of reinventing productivity and creating platforms that empower every individual and organization,” he said in a statement accompanying earnings.
Microsoft makes most of its money selling software to companies. The results show a strong growth in its business selling cloud computing to companies – an area Satya Nadella has cited as important for the future of Microsoft.
The business has continued to place great importance on its consumer products like the Xbox games console, its Surface range of tablet computers, and smartphones.
Stronger sales of phones and tablets helped boost revenues, with total consumer revenue up 47%.
Microsoft shares, which have climbed 33% over the past year, rose another 3% in after-hours trading to $46.36.
Microsoft has reported a 7% fall in profit during Q2 2014.
The tech giant said profit during the March to June period was $4.6 billion, compared with $4.97 billion during the same period last year.
Microsoft said its Nokia division, which it acquired in April, lost $692 million.
Microsoft said its Nokia division lost $692 million
Last week, Microsoft announced it would cut 18,000 jobs – the biggest round of job cuts in the company’s 39-year history.
“We are driving growth with disciplined decisions, bold innovation, and focused execution,” Microsoft CEO Satya Nadella said in a statement.
Satya Nadella said Microsoft is choosing to focus on revenues from the company’s cloud division, which he said were set to double to $4.4 billion this year.
Shares in Microsoft were mostly flat in trading after stock market hours.
Microsoft is launching its first phone – Android-powered handset Nokia X2 – after completing its takeover of Nokia’s handset division.
Android operating system, developed by Google, is usually seen as a rival to Microsoft’s own Windows Phone OS.
The company said the Nokia X2 offered it a way to hook users into its cloud-based services, several of which come pre-installed as apps.
Microsoft completed its takeover of Nokia’s handset division on April 25 at a cost of 5.4 billion euros ($7.4 billion).
The X2 is the follow-up to the original X, launched in February before Nokia sold its mobile business.
The original model became the best-selling mobile in Pakistan and the third best-selling handset in India – according to market-research company GfK – as well as achieving strong sales in Russia, Kenya and Nigeria.
Microsoft is launching its first phone, Android-powered handset Nokia X2
Nokia X2 features:
a slightly bigger 4.3in (11cm) screen
1GB of RAM – double the amount of memory previously included
a more powerful battery
the addition of a front-facing camera for selfies
The handset will cost 99 euro ($135) when released in July.
Microsoft’s video chat app Skype, its Outlook email service and its OneDrive internet storage apps all come pre-loaded.
The company is also promoting some of its other apps – including Bing Search, the Yammer business-focused social network and the OneNote idea jotting service – as optional free downloads for the device.
The tile-based homescreen and ability to see apps displayed as a scrollable list on the X2 mirrors the Window Phone user interface, which might help encourage consumers to later make the leap to Microsoft’s more expensive Lumia range.
Windows Phone now boasts over 250,000 apps including Instagram and Vine, which were high-profile absentees until November.
But several banking apps, games, video on-demand software, and apps used to control wearable fitness trackers – all available on Android – remain absent.
The Nokia X2 can run the bigger library of Android apps, but unless users hack the device they can only browse available software via the Nokia Store – which excludes some programs – rather than the more fully-stocked Google Play.
Microsoft has completed Nokia’s mobile phone deal for 5.44 billion euros ($7.5 billion).
The deal between Microsoft and Nokia should have been completed earlier this year but it was delayed by a hold-up in regulatory approvals.
The sale will see the end of production of mobile phones by Nokia.
Microsoft has completed its purchase of Nokia’s mobile phone business for 5.44bn euros
“Today we welcome the Nokia devices and services business to our family,” said Microsoft chief executive Satya Nadella.
“The mobile capabilities and assets they bring will advance our transformation.”
Noki will now focus on networks, mapping services and technology development and licenses.
Two Nokia plants will remain outside the deal – a manufacturing unit in Chennai, India, subject to an asset freeze by Indian tax authorities, and the Masan plant in South Korea, which it plans to shut down.
Former Nokia chief executive Stephen Elop has become executive vice president of the Microsoft devices group, in charge of Lumia smartphones and tablets, Nokia mobile phones, Xbox hardware, Microsoft Surface, and Perceptive Pixel (PPI) products.
Nokia has unveiled its first phablets as well as its first tablet computer at a company event in Abu Dhabi.
The Windows Phone handsets introduce the ability to change which objects in a photo are in focus after it is taken.
The Windows RT tablet has a 4G data chip, unlike Microsoft’s recently unveiled Surface 2.
Nokia World in Abu Dhabi is likely to be remembered as the Finnish firm’s last major event before it completes the sale of its hardware unit.
Microsoft agreed to buy the business for 5.4 billion euros ($7.4 billion) in a deal which the companies have said should be finalized by early 2014.
Microsoft’s share of the handset and tablet markets is growing but from a relatively low level, according to market research firm Gartner.
Windows Phone took a 3.3% share of smartphone sales in the April-to-June quarter, said the firm, with Nokia proving the most popular brand.
It also forecast that about 1.7% of all tablets shipped over 2013 as a whole would be powered by either Windows RT or the full Windows 8 operating system.
Nokia World in Abu Dhabi
Nokia showed off two phablets at the UAE launch. Both the Lumia 1520 and Lumia 1320 feature 6in (15.2cm) displays, allowing extra rows of apps to be displayed on their home screens than possible on smaller models.
The firm said that the extra space would also make it easier to use the phones’ touchscreen keyboards, suggesting this would appeal to business users who used productivity software.
A new Beamer app will allow the phones to stream the contents of their screens onto to a web browser on a separate display. It works by sending data via Nokia’s computer servers.
Another new app – Refocus – lets owners determine which parts of a photograph are in focus and which are blurred after it is taken. The phones achieve this by taking a series of images in quick succession at different focus lengths rather than replicating the light field effect captured by a Lytro camera.
The Lumia 2520 becomes the only Windows RT tablet made by a manufacturer other than Microsoft.
Dell, Asus, Lenovo, Acer and Samsung had all initially backed the platform only to later change tack.
The operating system runs on an ARM-based chip allowing it to offer superior battery life to the full Windows 8 system running on tablets powered by x86 processors, but it does not support as many programs.
Nokia’s tablet is slightly more compact than Microsoft’s version and also distinguishes itself by supporting an optional 4G Sim card.
However, bearing in mind Microsoft has already taken a $900 million write-down after weak sales of its original Surface RT tablet, one analyst questioned whether the firm would want to produce two competing models.
Nokia also added three models to its Asha range of low-end handsets targeted at emerging markets and shoppers on a budget. They run Nokia’s proprietary Series 40 OS rather than Windows Phone.
The most expensive of the devices, the Asha 530, now supports 3G data in addition to 2G, allowing faster internet access.
Microsoft has agreed a deal to buy Nokia’s mobile phone unit for 5.4 billion euros ($7.2 billion).
Nokia will also license its patents and mapping services to Microsoft. Nokia shares jumped 45% on news of the deal.
The purchase is set to be completed in early 2014, when about 32,000 Nokia employees will transfer to Microsoft.
While Nokia has struggled against competition from Samsung and Apple, Microsoft has been criticized for being slow into the mobile market.
“It’s a bold step into the future – a win-win for employees, shareholders and consumers of both companies,” Steve Ballmer, chief executive of Microsoft, said in a statement.
The transaction is subject to approval by Nokia shareholders and regulators.
Microsoft, one of the biggest names in the technology sector, has struggled as consumers have shunned traditional PCs and laptops in favor of smartphones and tablet PCs.
Critics say the firm has been too slow to respond to the booming market for mobile devices. It launched its Surface tablet PCs last year, but sales of the devices have been relatively slow.
Microsoft has agreed a deal to buy Nokia’s mobile phone unit for 5.4 billion euros
Analysts said that the company wanted to make sure that it got its strategy right in the mobile phone market.
Nokia was once a leader in mobile phones, but the firm’s sales fell 24% in the three months to the end of June from a year earlier.
It sold 53.7 million mobile phones during the quarter, down 27% on last year.
However, sales of its new Lumia phones, which run a Microsoft operating system, rose during the period.
Microsoft has also agreed a 10-year licensing arrangement with Nokia to use the Nokia brand on current mobile phone products.
Nokia also announced changes to its leadership team as a result of the sale.
Stephen Elop will step down as president and chief executive of Nokia Corporation and resign from the company’s board.
The firm said that he would become the executive vice president of the Devices & Services unit, adding that it expected him to “transfer to Microsoft at the anticipated closing” of the deal.
The transfer of Stephen Elop to Microsoft comes at a time when the company is looking for a new chief executive.
The current head of Microsoft, Steve Ballmer, announced last week that he would be retiring and is expected to leave the company within the next 12 months.
Stephen Elop who left Microsoft to join Nokia in 2010, has been cited by some as one of the frontrunners to replace Steve Ballmer.
Nokia said that once the sale is completed, it will concentrate on three key businesses – network equipment manufacturing, mapping and location services, and the development and licensing of technology.
Earlier this year, it agreed to buy Siemens’ 50% stake in their joint venture, Nokia Siemens Networks (NSN), which makes telecoms network equipment, for 1.7 billion euros.
Nokia has unveiled design files that will let owners use 3D printers to make their own cases for its Lumia phones.
Files containing mechanical drawings, case measurements and recommended materials have already been released by the phone maker.
Those using the files will be able to create a custom-designed case for the flagship Lumia 820 handset.
The project makes Nokia one of the first big electronics firms to seriously back 3D printing.
In a blogpost, John Kneeland, one of Nokia’s community managers, revealed the Finnish phone maker’s decision to release the 3D drawings.
Printing in 3D involves sending a design file to a printer that then forms a solid version of that object by slowly building it up in layers of plastic. Early 3D printers could only work in one color but the latest versions can produce intricate, multicolored objects.
Nokia has unveiled design files that will let owners use 3D printers to make their own cases for its Lumia phones
John Kneeland said Nokia was releasing what he called a “3D printing development kit” to help people produce the cases. The files are already available on the site Nokia maintains for its developers.
He said 3D printing was another way that the firm wanted to build links to that vast community of software and hardware engineers. To get the files, users must have registered with Nokia.
He said Nokia already used 3D printing internally to do rapid prototyping, but decided to back it more publicly to help the nascent technology realize its “incredible potential”.
In the future, he said, 3D printing was likely to bring about phones that were “wildly more modular and customizable”.
Nokia might just end up selling a phone template, he said, allowing entrepreneurs to use that to produce handsets that satisfy the particular needs of their locale.
“You want a waterproof, glow-in-the-dark phone with a bottle-opener and a solar charger? Someone can build it for you – or you can print it yourself,” he wrote.
He added that, in his view, 3D printing was a technology that justified its hype and said it was “the sequel to the Industrial Revolution”.
“However, it’s going to take somewhat longer to arrive than some people anticipate, and that may disappoint people,” he said.
Asha, the budget smartphone line from Nokia, is outselling its premium handset offering, the Windows-run Lumia, by over two to one.
Nokia’s quarterly results, published on Thursday, revealed the total number of both Asha and Lumia devices sold in the last three months of 2012 was 14 million. Only 4.4 million were Lumias.
There have also been rumors that Apple may offer a lower-priced iPhone model.
Reports that a senior Apple executive denied this have been withdrawn.
“We forecast that by 2016, 31% of the global overall handset market will be low-end smartphone,” said Ian Fogg, principal analyst at IHS.
“An entry-level smartphone is very different from a high-end smartphone,” he said.
“Smaller, cheaper devices have processors from two or three years ago, they have small screens with low resolution, and weaker cameras. They can all do email and the web but gaming and browsing is a much better experience on the higher end phones.”
Asha, the budget smartphone line from Nokia, is outselling its premium handset offering, the Windows-run Lumia, by over two to one
However, the difference in cost to the consumer is significant.
“Apple still play out at the premium end of the market,” said Ian Fogg.
“Can they remain profitable and successful being in a small part of the handset market or do they need to be a bigger player to get the economies of scale right?”
“Apple makes high quality products, it doesn’t make cheap products,” he added.
“That doesn’t rule out Apple creating a cheaper iPhone that still has high quality components. Look at the iPod range – they started with a premium price product, then they added the mini, the nano, the shuffle – they went to a range of products hitting different price points.”
Ian Fogg pointed out that there are currently variations of the iPhone 4, 4S and 5 available at different prices.
“Their strategy has been to reuse previous generation model rather than build a new model,” he said.
“Apple, I’m sure, is evaluating that strategy. Is it better to use a tried and trusted design that they know how to manufacture and that the consumer understands, or is it better to design a new model that hits that price point?”
At the Consumer Electronics Show in Las Vegas this month, Chinese phone manufacturer ZTE announced plans to launch a lower-end smartphonerunning on Mozilla’s Firefox operating software in Europe this year.
“I think Apple should be more aggressive with its smartphone range,” said Ian Fogg.
“I think the strategy they have had of reusing previous year’s models has been quite smart, but there is also an opportunity to design a new product that hits that low price point.”
Nokia has apologized after it emerged that an advert featuring video footage which appeared to have been filmed with its new flagship smartphone Lumia 920 had in fact been created using different equipment.
The Verge tech site revealed the issue after it noticed a window reflection revealed a cameraman holding what appeared to be an SLR camera.
In a blog post the handset maker said it should have “posted a disclaimer”.
The news threatens to take the shine off the launch of the Lumia 920 phone.
Investors had already shown doubts about whether the Windows Phone 8 handset could revive the Finnish company’s fortunes, sending its shares nearly 8% lower on Wednesday.
Nokia has apologized after it emerged that an advert featuring smartphone Lumia 920 had in fact been created using different equipment
In Thursday’s trade the stock fell a further 6%.
The advert showed a man filming his girlfriend using the new smartphone while both of them were riding bicycles.
The footage cut from professionally-filmed material, featuring both actors, to what looked like it was the video captured by the man’s Nokia device.
A split-screen sequence then showed what the smartphone’s footage would look like with Nokia’s optical image stabilization (OIS) feature turned on and switched off.
The footage was intended to support the firm’s claim that its technology helped reduce image blur. It was shown at a press conference on Wednesday to support Nokia’s boast that the Lumia 920 featured the best smartphone image quality on the market.
The Verge’s article said: “too bad it’s faked”.
Nokia’s blog acknowledged the problem in a post titled “An apology is due”.
“We produced a video that simulates what we will be able to deliver with OIS,” wrote the site’s editor Heidi Lemmetyinen.
“Of course, hindsight is 20/20, but we should have posted a disclaimer stating this was a representation of OIS only. This was not shot with a Lumia 920… we apologize for the confusion we created.”
Nokia also released footage that had been shot with the model.
Nokia has decided to add Groupon offers to maps on its Lumia smartphones.
By clicking on a green “G” icon, US users can now buy Groupon’s discounted deal-of-the-day vouchers from their handsets and then locate the retailers participating in the offers by using Nokia’s navigation system.
An analyst said the deal could be an advantage for Groupon, which had so far not been “local enough”.
Nokia said it was interested in different ways of monetizing its maps.
The new location platform will be integrated into the phone’s Windows Phone 8 operating system.
Nokia has decided to add Groupon offers to maps on its Lumia smartphones
“It is to our benefit to ensure that many different companies use this, and there will be companies taking advantage of the platform who may compete with other elements of Nokia,” said the Finnish company’s head, Stephen Elop.
“But that has to be okay. It has to be, you have to think that way. The competition… is not with other device manufacturers, it’s with Google.”
Nokia had been trying to make its maps available to a wide range of people, said Martin Garner, an analyst from CCS Insight.
He added there were already some major web players using them, including social network Foursquare and Yandex, Russia’s main search engine.
“It’s not a surprise that Groupon is doing this, it’s a logical extension,” he said.
“There’s a whole area of web use that could be made better if it used local information and maps, and one of the big weaknesses of Groupon’s strategy has been that it hasn’t been local enough.
“And by working with Nokia they can do this better. Lots of people are very interested in the local commerce, and this could be a way of making this work.”
When Apple’s voice-activated assistant Siri has been asked over the weekend “What is the best smartphone ever?”, it appeared to favor the iPhone’s rival, Nokia’s Lumia 900.
But Siri now responds to the same question with a jovial: “Wait… there are other phones?”
Nokia has accused Apple of “overriding the software” after the quirk was noticed.
Apple would not confirm that a change had been made.
The Siri software, which is featured on Apple’s iPhone 4S, uses the computational search engine Wolfram Alpha to serve answers to some questions.
For a question such as “what is the best smartphone ever?”, Wolfram Alpha would pool available reviews and comment in order to come up with what it feels is the right result.
When Apple Siri has been asked over the weekend "What is the best smartphone ever", it appeared to favor Nokia’s Lumia 900
In this instance, the “best” result was determined by reviews on the website of US retailer Best Buy.
Nokia’s Lumia 900 came out on top.
However, when asked the same question, the software no longer attempts to search Wolfram Alpha to find its answer, instead producing a default answer.
Nokia spokeswoman Tracey Postill told the Sydney Morning Herald: “Apple position Siri as the intelligent system that’s there to help, but clearly if they don’t like the answer, they override the software.”
However, Nokia said Tracey Postill’s comments were “lighthearted” and “taken out of context”.
“We were certainly flattered and honored,” Nokia spokesman Doug Dawson added.
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