So an iPhone a Galaxy S5 and a Lumia 1520 walk into a bar

Short Takes: April 25, 2014

An often irreverent look at this week's other news

An often irreverent look at this week's other news...

Note: Normally, on the Friday after a Microsoft earnings announcement, I dedicate most of Short Takes to tidbits from the firm's post-announcement conference call. So there's a bunch of that, of course, and you should also check out "Microsoft Earns Less, But Beats Expectations" for the high-level view on that story. But as it turns out, there is much more going on this week as well, including today's finalization of Microsoft's purchase of Nokia's devices and services businesses. So settle in and grab a cup of coffee (or the drink of your choice, time zone dependent). We have a few things to get through today. --Paul

R.I.P., Nokia

The first, sadly, is the death of Nokia. Pedants will gleefully point out (because being pedantic is what makes them happy) that Microsoft didn't just buy "Nokia" (e.g. "all of Nokia") and that a company called Nokia is still sitting out there, doing ... stuff. Sure they are. Just like there's a company out there called Polaroid that no one cares about either. From the perspective of tech enthusiasm, Nokia is indeed dead. It's over. And the parts that mattered—well, most of them, I guess—are now just part of Microsoft. And although I do sort of wish that Microsoft had acquired the HERE location technology along with Nokia's devices and services businesses, too, come on. That little business doesn't make the picked-clean carcass of the company now called Nokia any more interesting.

So, now what?

I was curious to see how many details we'd get about Microsoft's absorption of Nokia. (Yes, yes, "the parts of Nokia that matter." Settle down.) For example, of the 30,000 people coming over to Microsoft's employment rolls, how many of them are in manufacturing? And given that Microsoft doesn't actually manufacture any of its own products itself, what will it be doing with Nokia's far-flung manufacturing centers, and all of the jobs that are tied to them? There are precious little details, as it turns out. Typical quote that's attributed to Satya Nadella: "we remain focused on delivering innovation more rapidly in our mobile-first, cloud-first world." That's nice. But seriously.

Here's what we know:

Former Nokia CEO Stephen "Fifth Column" Elop will serve as executive vice president of the Microsoft Devices Group and report directly to Mr. Nadella.

That business is responsible for Lumia smartphones and tablets, Nokia mobile phones, Xbox hardware, Surface, Perceptive Pixel (PPI) products, and accessories.

And it's "an expanded team" made up of Xbox, Xbox Live, Microsoft Studios, Microsoft Hardware, Surface and Nokia Devices and Services.

And it's "committed to continuing to support the feature phones, the Asha family, and the Nokia X family of devices announced at the Mobile World Congress in February," as Mr. Elop says.

Microsoft now owns over 130 Nokia sites across 50 countries, including a number of factories and other manufacturing facilities.

This one is interesting: "With the Nokia mobile phone business, Microsoft will target the affordable mobile devices market, a $50 billion annual opportunity." Someone pointed out that is more about Asha than Lumia, and that's almost certainly correct.

The completion of the acquisition is "a process that is expected to take 18 to 24 months to complete."

As reported previously, a new subsidiary of Microsoft Corporation called Microsoft Mobile Oy will continue developing, manufacturing and distributing Lumia, Asha and Nokia X mobile phones and other devices.

Microsoft Earnings Recap: Why Were Investors so Happy with Microsoft's Flat Results

My biggest question around the Microsoft earnings this week—the firm's profits were down slightly, year over year, and revenues were flat—was why investors were so happy with what they saw. As it turns out, the normally superstitious Wall Street is apparently coolly evaluating how well Microsoft is transitioning its cash cows—Windows, Office and Server—to the cloud, its new business model. And they like what they see. One of the key numbers in this earnings announcement was software revenues to businesses, and that was up 7 percent to $12.23 billion. In other words, Microsoft's most important customers are along for the ride. And investors are happy.

Microsoft Earnings Recap: Here's the Real Shocker

To be honest, I never doubted that businesses would follow Microsoft down that cloud and mobile rabbit hole. I mean, what else are they going to do? Adopt Linux? While you contain your laughter, however, consider the following bit of legitimately surprising good news from the earnings report: Consumer sales—which includes software like Windows but also Surface and Xbox—actually jumped 12 percent to $8.3 billion. That is amazing, both because the PC industry is supposedly tanking and because consumers, we're told, are far more interested in Android, iPhone, and third-party services like Dropbox and so on.

Microsoft Earnings Recap: A New Slogan for the Software Giant

Remember when Microsoft's mantra was "a computer on every desk and in every home"? Well, new CEO Satya Nadella offered up a new vision for Microsoft that echoes that suddenly old-fashioned sentiment. Noting that Microsoft would now think holistically about its products, he said that the firm would provide "a cloud for every device, every person, and every platform." I like it.

Microsoft Earnings Recap: How Big is Office 365?

The saying about Microsoft is that it's always looking for its next billion dollar business. Office 365 was once that next billion dollar business. But as today it's a $2.5 billion business, thanks to its annual revenue run rate of $2.5 billion. Nadella called Office 365 the "heart and soul of the cloud lineup."

Microsoft Earnings Recap: Windows Subscription Offering like Office 365?

During the Q&A portion of the earnings call, someone asked about Microsoft's decision to make Windows and Windows Phone free on devices with screens smaller than 9 inches. Would there be any further changes to Windows licensing? I'm wondering the same thing and am curious whether this decision impacts a subscription offering for Windows similar to Office 365. Nadella's response was interesting. He said that Microsoft wants Windows "to be ubiquitous," and that that can't happen until you get over the whole chicken/egg (e.g. developer/user) thing. That is, the ecosystem can't be healthy without developer support, and developers won't support it without users. So by making Windows for low-end devices free, Microsoft can quickly build the user base. And developers will follow. He also see this as a market expansion opportunity around wearable computers and other Internet of Things devices. In other words, a subscription for Windows might actually not make any sense at this point.

"Apple Improves Mac Pro Ship Times to 3-5 Weeks"

Of course, they're only making 3-5 a week, but that's still good news.

"Google+ Boss Vic Gundotra Leaving Google"

But because he announced this on Google+, no one even noticed for a few days.

"Apple, Google to pay $324 million to settle conspiracy lawsuit"

Translation: Apple, Google will pay absolutely nothing and pretend conspiracy lawsuit never even happened.

But Wait, There's More

Don't forget to follow me on Twitter and the Paul Thurrott's SuperSite for Windows.

I'm trying to change the book publishing model, and would appreciate your support: Windows 8.1 Field Guide is now complete and available for only $2 in PDF, MOBI and EPUB formats, and it will be in the Kindle and Nook e-book stores soon. But I have other free e-books available too, including Windows Phone 8 Field Guide and the in-progress Xbox Music Field Guide. Coming soon: Windows Phone 8.1 Field Guide.

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