

Nokia Agrees to Buy Alcatel-Lucent for $16.6B - alphadevx
http://recode.net/2015/04/14/nokia-agrees-to-buy-alcatel-lucent-for-16-6-billion/

======
pavlov
Essentially this means that Nokia won't get back into consumer hardware for a
good while. The mapping division (Here) will probably be sold soon.

The mobile networks business is now the primary driver at the company. They'll
have their hands full trying to integrate the Alcatel-Lucent networks business
with their existing assets. (Remember that Nokia's networks business today is
already the result of a merger with Siemens and a purchase of Motorola's
networks division, so they have some experience with that.)

Nokia is now a formidable competitor to Ericsson and Huawei, but it won't be
on Samsung's or Apple's radar again.

I know that Nokia does license the Nokia brand to Foxconn for Android tablets
sold in the Chinese market... But that's not a sign of life in Nokia's
consumer ambitions any more than it is for other brand licensors like Kodak or
Polaroid.

~~~
n8m
I just hope whoever buys HERE doesn't screw it up. At the moment I do like
them more than the google maps. They are also cheaper when it comes to
licenses.

~~~
pavlov
I think Samsung will pick up Here. Seems like a bargain for them.

Samsung has been slowly building up their own "shadow stack" for mobile. They
have everything from the OS up, but map data is a huge missing piece.

Also, I think Samsung's homegrown Tizen OS has some ambitions on the
automobile side, and that's a market where Here has been doing well.

~~~
n8m
I've heard rumours Samsung is already using HERE heavily internally. So it
would make sense- but what will happen to the other that are currently using
it to (they've mentioned Microsoft, BMW etc. in the article).

------
peteratt
HERE engineer here (yes, I also sometimes hate the noticeable amount of
redundancy of our corporate brand). One important point that analysts haven't
stressed enough while evaluating potential buyers, is the role our top
customers play in all this dance.

By top customers I'm referring to car manufacturers in particular. They are
the ones who are paying/will pay top dollar for our connected car offerings. A
sale to a single car manufacturer would make the rest go away. A sale to
Google, for example, would completely destroy our trust – these guys _hate_
Google. A sale to Uber... Same thing.

Facebook, maybe? They've been known for respecting independence of acquired
companies to a high degree. That could be one of our best shots IMO.

~~~
chipotle_coyote
Is it perceived as a given that Nokia's going to dump HERE? I used to be with
the Point & Find group, which is what became City Lens -- my impression is
that they were working on a quasi-secret project all last year, some kind of
outdoor adventure thing, but I noticed last month that just about everyone I'd
worked with changed their LinkedIn status to things no longer associated with
Nokia/HERE.

~~~
sirkneeland
Yeah, that was canned.

------
vnglst
I don't really understand how this works. Microsoft bought Nokia for about
$7B[1] and now Nokia pays more than twice that amount for Alcatel? Where is
this money coming from and why is Alcatel worth so much more?

[1] [http://www.businessinsider.com/microsoft-closes-nokia-
acquis...](http://www.businessinsider.com/microsoft-closes-nokia-
acquisition-2014-4?IR=T)

~~~
Aoyagi
Don't forget that Microsoft('s lackey) took care of lowering their value as
much as possible before buying the Devices and Services unit for some spare
change.

~~~
dagw
Come on. Nokia was doing a fine job of lowering the value of their handset
business on their own.

~~~
pavlov
Yeah. It wasn't Elop who created one of the most dysfunctional software
development units ever. He was brought in when the damage of previous bad
management was just becoming fully apparent.

Nokia in 2007-2010 was spending many times more than Apple on R&D. For that
money, they got multiple infighting operating system teams each developing
their own half-baked thing (Symbian, MeeGo, Qt, S40) and device teams that
were building uncompetitive devices on top of 3-year-old software.

~~~
josh2600
Two words: burning platform.

[http://communities-dominate.blogs.com/brands/2012/06/the-
fin...](http://communities-dominate.blogs.com/brands/2012/06/the-final-
reckoning-of-burning-platforms-memo-damaged-nokia-by-wiping-out-13b-in-
revenues-and-destro.html)

There was just no reason to write a memo like that. It destroyed their
business, almost singlehandedly, and no, I'm not exaggerating. The
consequences of that memo were insane: Nokia's handset sales died all over the
world all at once.

~~~
pavlov
We don't have more than quarter-level visibility. All we know is that Q1 2011
sales crashed and Elop wrote his memo. Which is the cause and which the
consequence?

In Q4 2010, Nokia stuffed the channel with outdated products. In a market that
was growing accustomed to iPhone and Android, Nokia tried to sell consumers
products based on the first touch edition of Symbian S60 -- the same software
that was considered outdated when it first shipped in Nokia 5800 years
earlier. (Because of the way Nokia's product development pipeline worked, the
mid-range phones they released in late 2010 contained software that was
several years old.)

Isn't it possible that Nokia's Q1 2011 sales crashed simply because the
channel was full of Symbian phones that just were not selling? As CEO, Elop
would have visibility into that when he wrote his infamous memo.

A point against the "evil memo destroyed sales" theory is that purchasers at
large operators don't turn on a dime. When they stopped buying Nokia's phones
in Q1 2011, the decision was already made earlier.

~~~
josh2600
The fallout from that memo was instantaneous and widespread. I worked in
wireless at the time and everyone I knew at all of the carriers began to pull
Nokia inventory. This was not true in many markets.

Even if the burning platform concept was correct, releasing it in a
companywide email instead of strategically shifting the company and then
announcing the change in a measured, considered fashion would've been much
better for their cash flows.

Purchasers at large operators don't turn on a dime, usually, but I would argue
that the CEO of a handset manufacturer declaring their entire existing lineup
of products is going to be discontinued in viscerally graphic terms is one of
the things that might spur such quick change.

------
fnordfnordfnord
Nokia recently auctioned off literal tons of engineering equipment. Looks like
they closed a huge engineering facility in Oulu, Finland. A lot of it looked
like obsolete stuff (like for a big product line sustaining-engineering
group). I don't know enough about cellular to say whether or how much of the
stuff was really useful for new product development; but some of the equipment
looked very recent. The only thing that I inferred at the time was that T&M
resellers are going to have a better year than Rhode & Schwarz.

[http://www.equipnet.com/auctions/exceptional-offering-of-
com...](http://www.equipnet.com/auctions/exceptional-offering-of-
communication-testers%2c-analyzers%2c-oscilloscopes%2c-ge/656/)

~~~
TorKlingberg
That looks like equipment from Nokia's handset division ramping down.

------
ed_blackburn
I was an under graduate engineer at Nortel Networks in the late nineties and
early nougties writing code and building rigs to automate the testing of OC192
tx / rx components before they were assembled and usually dropped under the
ocean.

I was amazed at the capabilities of this hardware and the next generation from
both Nortel and its competitors,like Lucent.

It amazes me what is achievable but not viable for mass production. Or
desirable by customers (good enough).

An industry that matters so much. With no backbone there is no network in so
many places. Perhaps a few mergers will unlock the doors?

------
i_have_to_speak
Valued less than WhatsApp!

~~~
moondowner
Don't forget that in 2013 Microsoft bought Nokia's handset division for half
of the price Nokia is paying now for Alcatel-Lucent.

~~~
Aloha
I'd argue that the networks business is and always has had more long term
value than handsets.

------
ulfw
So it's Nokia-Siemens-Alcatel-Lucent? A powerhouse!

~~~
masklinn
Siemens is still Siemens, and Nokia bought Siemens's shares in NSN (renaming
it Nokia Networks) in 2013.

~~~
raverbashing
Yes, they're still going down the drain

It's a company that has no speed to compete in the modern world

See what divisions they closed/sold off in the past years

Can't say I'm sorry

------
ksec
So basically now Nokia, Erisson, Huawei or ZTE ( Are there any others )
actually build and run the Network Backend of Mobile Network, while Mobile /
Cell Operators does the sales, marketing and customer services?

~~~
Swannie
There are.

Cisco and others are getting into the small cell space.

Not that many people realize that Samsung are in to building base stations.

Cisco have always been in the back haul, core mobile routing space, along with
Juniper, and some others smaller players.

------
jd3
So Nokia owns Bell Labs now? What a world we live in.

------
eitally
This is interesting, and probably good. These are two companies that make
sense to consolidate, especially as both eye developing markets in SE Asia &
Africa, and _especially_ those markets that are open to Chinese development
monies+influence (mostly in Africa).

On the integration side of things, yes, it will probably be a little
challenging from a business systems & personnel point of view if they really
want to become a single-faced corporation, but on the manufacturing &
engineering side I think it'll be pretty easy. I don't know if my company is
the largest EMS partner for either one, but I do know that both Nokia
(otherwise referred to as NSN, Nokia-Siemens Networks) and ALU are both top-10
customers of ours, and collectively responsible for a couple billion in
revenue. I mention this not because of anything to do with my company, but
because both are already setup for effective automated integration with their
EMS partners, so whatever they do on their side (e.g. changes to EDI
rules/structure, ECO processes, NPI processes, etc) will be pretty easy to
trickle down and deal with on our side.

My hope is that Nokia become the business leader part of this acquisition, not
Alcatel-Lucent. They are very challenging to work with sometimes.

------
alphadevx
I'm curious to know what this means for a potential Palm revival now, given
this: [http://www.webosnation.com/its-confirmed-tcl-bringing-
back-p...](http://www.webosnation.com/its-confirmed-tcl-bringing-back-palm)

~~~
Maakuth
Very likely nothing at all. Isn't TCL just an Alcatel brand licensee? So it's
not connected to Alcatel-Lucent in other ways than the name.

edit: question mark

~~~
alphadevx
Actually I'm sure you're right, it seems TCL is a separate company based in
China.

------
yaiu
Plan 9 changes hands

~~~
bwindels
Plan 9 was licensed under the GPLv2 last year:
[http://www.theregister.co.uk/2014/02/14/plan_9_moves_to_gnu_...](http://www.theregister.co.uk/2014/02/14/plan_9_moves_to_gnu_space/)

~~~
stonogo
Lucent still holds the copyright, regardless of which licenses they apply.

------
funkyy
Sounds like Nokia is looking for a way to prepare itself to enter the market
with new products. Good news for Europeans for sure, since Nokia was the
company that usually managed to translate products to European realities.

~~~
tormeh
I don't think this has any positive implications for a potential new Nokia
handset business. It is, however, possibly bad news for Ericsson and Huawei.

------
chernevik
It's possible that the French government's approval of the deal is a dim
glimmer of deregulation:

[http://www.ft.com/intl/cms/s/0/38b9dbf6-e2bd-11e4-bf4b-00144...](http://www.ft.com/intl/cms/s/0/38b9dbf6-e2bd-11e4-bf4b-00144feab7de.html#axzz3XNGZS6SG)

As tangents go this is an important one. Structural issues are strangling
European growth and employment. Reform in France alone would make a big
difference, and help pave the way for truly screwed up economies like Italy
and Spain.

------
legulere
For me this can be seen as a symptom of the problem with technology companies
today: If you're too small you won't be able to survive. So everyone gets
bought so that they don't die.

In the end you have a few big companies splitting up the market under
themselves and the hurdles for a market entry are too high.

An even better example for this are semiconductor foundries.

------
unfocused
I wonder what this means for Alcatel-Lucent here in Ottawa. I briefly worked
there in 2001 right after Alcatel bought out Newbridge. There is a strong
networking division there designing some of those large backbone "routers".

------
f00fc0d3
Beginning of the end of Nokia Networks. Looks like they dont have any clue
what to do. ALU enodeb is crap, Nokia ancient Flexi is crap and their new
stuff will be crap if they will manage to sell this to somebody :-)

------
jackbravo
Alcatel is one of the main companies that sells FirefoxOS phones here in
México. I wonder if it is the same in other countries. And I wonder if this
will affect FirefoxOS in the long run? Will they switch to Windows?

~~~
grok2
Alcatel is not in the phone handset business anymore -- it is just the name
that is being used by other manufacturers (perhaps TCL).

------
uberneo
Alcatel bought Lucent .. Microsoft bought Nokia .. now Nokia bought Alcatel-
Lucent .. All mixed up

------
liotier
Only two major mobile telecom equipment manufacturers left. Great news for
Huawei !

------
tiernano
That was quick... there there rumors just last week...

~~~
ghshephard
Rumors typically only become public as the deal is closing, and more people
are brought in to do the work on it. The fact that there were rumors was a
strong indication that the deal was about to take place.

~~~
rnl
Not quite, Apple was rumored to be buying Tesla, which would have made sense
considering thier cash reserves, however the deal never happened.

~~~
gilgoomesh
Apple rumors are not a typical example. There's a whole industry of idiots
"analysts" who do nothing but release click-bait speculation about Apple.

------
shmerl
More patent trolling coming?

------
steamy
It looks like a merger deal to me with Nokia having the upper hand than an
acquisition.

------
ck2
Patents. That's what this has to be about.

Produce little to nothing and just sue for royalties on other manufacturers.

~~~
chipotle_coyote
I think you -- and others who haven't checked, which is understandable --
imagine that after Nokia sold their handset business to Microsoft, nothing was
left but a tiny little husk. If that were true, your assumption would probably
be correct, but it isn't. Nokia ended 2014 with over 60,000 employees
worldwide and nearly €13B in revenue. They're still a _really big_ company.
Sure, they make some money from patent licensing -- as do all companies of
that size -- but the vast majority of their revenue comes from network
equipment and services.

