I was thinking, well, how about softy's partners like NOK. Then I found this from the Ballmer letter to shareholder Oct 2012:
"...we will focus relentlessly on delivering delightful, seamless experiences across hardware, software and services. This means as we, with our partners, develop new Windows devices we'll build in services people want..."
Sentiment: Strong Buy
They will definitely make a phone...the smartwatch is just M$ copying someone else's idea again (poorly and late). They will likely sell off the awful, loss-making money-pit that is bing, and they may sell off the XBox division, according to informed sources.
Nokia is doomed.
Sentiment: Strong Sell
A long practice of Microsoft is the use of misdirection in executing pivotal elements of strategy. They say they're going in a direction, and they go there, but their main effort is (surprise!) elsewhere. This is nothing more than sound and responsible business practice, take from "The Art of War" - if your opponent knows what you're going to do, they can effectively counter you, and vice-versa.
Gates and Balmer are two smart guys. They know a change in direction for a large company is hard, sometimes necessary, and must be completed quickly if it's to be done well.
We won't know their intentions until well after the course if set and a number of critical actions are complete.
In regard to Nokia - keep in mind the Nokia Board of Directors hired Elop. To their great credit, they recognized Nokia needed to bring in someone new to take Nokia in a new direction. Nokia was in a global business, and the view from Helsinki was too parochial.
Given the fact they recognized and acted on the idea they needed to expand Nokia horizons - they hired a former Microsoft guy for a reason - it is out of the question the Board of Directors would oppose a takeover by Microsoft? If Microsoft gave assurances Nokia would retain a largely European staff and direction, if faced with the choice of being bought or dying a slow death, would the Nokia Board choose a slow death? I don't think so.
The key to this is patents, and to a lesser extent Here. Microsoft can duplicate Here. It would take time, but it is doable. Microsoft cannot replace Nokia patents, any more than Google could replace Motorola patents. but in time they could work with and around Nokia patents, just as HTC and Samsung and Apple do today.
Bottom line - Nokia needs Microsoft more than Microsoft needs Nokia. Skype has done well within Microsoft, as a separate entity. Nokia could do the same.- separate offices/facilities, separate leadership, but with full integration.
This is really interesting.
Great post clcellve.
I think it's becoming pretty clear that for Microsoft to really compete in mobile they need broader integration, both horizontal and vertical. Strategic alliances are fine to test market, and establish some market share. But NOK is the obvious hardware partner to help fill in the need for a more holistic, self-determined approach to the entire span of control needed to compete aggressively in the mobile ecosystem. MSFT has massive global capacity in software and cloud, NOK would provide the necessary driving force in mobile related hardware manufacturing and design.
I didn't see this need even as recently as six months ago, but with the obvious developing success of Lumia and the Windows platform for mobile, MSFT has to be considering a combination. They may need to isolate devices, but this is getting closer and closer to a no-brainer, especially if MSFT wants to become dominant rather than just the third option in smartphones.
An acquisition premium is not why I own the stock - I think NOK is going to do very well on its own, but it certainly makes it more entertaining to own.
Sentiment: Strong Buy
I disagree that Nokia needs Microsoft more than Microsoft needs Nokia. I believe this was the case back last year, but it has become obvious that without Nokia, MSFT is dead in the water on their mobile OS platform.
Sentiment: Strong Buy
Xbox for sure, Surface of course... Other items of interest from their partners? Could Bing and HERE merge? Or is ORCL more interested in HERE? INTC and NSN? All fantasy land speculation... would really love to hear more from Mr. Ballmer, apparently we will hear more over the next couple months.