Headline July 30, 2014


ONE was a long-expected divorce,  the other a much predicted wedding.

On September last, America's Verizon Communications bought Britain's Vodafone out of Verizon Wireless, the biggest mobile operator in the United States.

It paid a staggering  $130 billion  in cash, shares and bonds for Vodafone's 45% stake. The very next day Microsoft bought Nokia's mobile-phone business for €3.8 billion ($5 billion).

The American software company will also pay the Finnish firm €1.7 billion to license its patents, and lend it €1.5 billion.

Verizon's purchase is the  second biggest  in the industry's history, beaten only by Vodafone's own acquisition of Mannesmann, a German firm, in 2000.

Nokia, once the world's biggest maker of mobile phones, is quitting  -for less than Microsoft paid for Skype, an  Internet phone-call company, in 2011. Among the 32,000 employees to be transferred was Stephen Elop, Nokia's Chief Executive, a former high flyer at Microsoft.

Having bet Nokia's future on Microsoft's windows operating system two years ago, Mr Elop was long  talked of as likely successor to Steve Ballmer.

The software giant was betting that it could still do what it had so far failed to do: succeed in mobile computing and turn itself into the  ''devices and services'' company that Mr Ballmer had promised in the corporate plan just earlier.

Together the transaction made the outlines of the mobile-telecoms industry clearer at three levels.

The main makers of mobile-network equipment, the Chinese excepted, have now given up making handsets.

The handset-makers have coalesced around three  ''ecosystems''; Google's Android, Apples iOS and, in distant third place, Microsoft's Windows. And the operators of mobile network are preparing for a fresh wave of consolidation.

First, the business of equipment-making. Having bought Germany's Siemens out of their joint venture in July, 2013, Nokia now does little else   (though it is keeping its maps division and many patents).

With Nokia gone,  no big  western equipment maker will produce mobile phones any more. Ericsson of Sweden quit in 2011, selling to its partner, Sony of Japan.

Alcatel of France sold its brand to a Chinese firm.

The equipment business is more long-term says Rajeev Suri, the head of Nokia's network arm. ''It's less prone to the volatility we've seen on the devices side.'' Better still Mr Suri adds, his firm specialises in 4G networks, the latest wave, where it has around one-fifth of the market.

Of the leading equipment-builders, only two Chinese companies, Huawei and ZTE, now both build networks and make phones. They will carry on.

Chen Lifang, a member of Huawei's board, said later, that although  ''the majority of efforts''  will go into equipment, which provides the bulk of the firm's revenues and profits,  ''the device is very important''.

Nevertheless, the handset-making business is clearer now that Microsoft has swallowed Nokia, which already makes more than  80%  of Windows phones.

In smartphones, Windows is far behind Android, used by many manufacturers, and iOS, which runs only on Apple's own pricey devices  (though it was expected to unveil a cheaper  iPhone later in the month).

Apart from its Xbox games console, Microsoft's record with devices has been very poor. It is not clear that its own phones, still bearing Nokia's brand, will narrow the gaps.

Microsoft insists that it will not mimic Apple and stop other phonemakers using its operating system.

Huawei says Microsoft has been in contact already to reassure it on this. But less healthy manufacturers may feel that in any case, their options are just so clearly narrowing.

The Honour and Serving of the Post continues. Thank you for reading latest developments and research. 

HTC, a Taiwanese company whose star has fallen as fast as it rose, said on September last, that its sales in the first eight months of  2013  were  32% lower than a year before  (like Huawei it makes mainly:

Android phones, but some with windows too).

Blackberry of Canada, whose smartphones like Nokia's, were once wildly popular but these days have been overtaken even by Windows devices, recently put itself up for sale.

Asked whether might be interested in buying either, Mr Chen told journalists: "No. We haven't considered that."

With respectful dedication to the Students, Professors and Teachers of the world teaching  Telecommunication science and  Technology. See Ya all on  !WOW!  -the World Students Society Computers-Internet-Wireless:

''' Rationalisation '''

Good night and God bless!

SAM Daily Times - The Voice of the Voiceless


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