Google is a dangerous company. Most companies specialize in one thing, make money doing that one thing, and then invest a certain percentage of that money being made into expanding the business. Google, on the other hand, specializes in advertising, and all the money that they make from those little blue links for cheap Canadian prescription drugs is used to provide an inordinate number of services to consumers for nothing.
Enter the Moto G that was announced yesterday at a press event in São Paulo, Brazil. Google took control over Motorola Mobility about a year and a half ago, and they’re already applying the Google mentality to the once giant American mobile phone maker. Because Google prints money thanks to their ad business, they can sell an incredibly capable smartphone for just $179 unsubsidized.
How capable is capable? The Samsung Galaxy S III, launched in early 2012, had a 720p display, quad core processor, and an 8 megapixel camera. It also sold for over $600, though in the US and UK that cost was obfuscated with a two year contract. The Moto G has the same 720p display, albeit smaller and using LCD technology, the same quad core processor, though it’s four ARM Cortex A7 cores instead of four ARM Cortex A9 cores, and a 5 megapixel shooter.
Again, all that for $179. You can buy three Moto G phones for the price of an iPhone 5s and still have over $100 leftover to go out with your mates to the pub or take the misses out for dinner and a movie.
What does any of this have to do with Nokia?
Nokia was the first mobile phone maker to introduce the phrase “the next billion” into the mobile industry’s lexicon. Their thinking was that there’s a huge market out there of people who would love an iPhone 5s or Galaxy S4, but can’t afford one, so “cheap” smartphones like the $150 Nokia Lumia 520 were created.
Those cheap Lumias have been selling, that’s a fact. Nokia’s Q3 2013 financial results say the Finnish firm sold 8.8 million Windows Phones at an average selling price of $190, which is down from the $210 average selling price during the same quarter a year prior. In other words, Nokia knows that the future is cheap handsets, hence the creation of Lumia 520 and the Asha portfolio of feature phones that do more than your typical feature phone, but not enough that you can actually call them smartphones.
With the Moto G, Google says they’re targeting the 500 million people who are going to spend roughly $200 or less on a smartphone during the next 12 months. That’s not exactly “the next billion”, but it’s still a sizable market. On stage, Google called out the elephants in the room, Apple and Samsung, for their strategies of capturing the low-to-mid range segment. Samsung’s Galaxy Fame was mentioned, and mocked, for delivering inferior specifications. And Apple’s iPhone 4 was name checked as being too “old”, leaving consumers with only $200 to spend feeling like they’re relegated to the past.
How should operators feel about the Moto G? If I were in charge of a wireless network, I’d be thrilled. Earlier this year, Open Signal did some research on the relation between the size of a phone’s screen and how much data a person consumes. Their conclusion was that nearly 300 MB of data was consumed for every extra square inch of real estate. Offer your customers a phone with a larger display that’s packed to the gills with what are arguably the best internet services currently in existence, and sit back and watch your customers upgrade their data plans so they can watch more, read more, and chat more.
Looking out into the future, if Google can make a Galaxy S III class phone for $179 and launch it just 18 months after the Galaxy S III hit the market, just think of what we can expect from Motorola this time next year. It might seem hard to imagine now, but a large 1080p smartphone at under $200 that delivers Google’s vision of a connected device will be on store shelves all around the world.
It wasn’t that long ago when you needed to be a businessman to be able to spend several thousands of dollars on a briefcase sized appliance that let you make phone calls while out in the field. Today you can do that with a $25 Nokia phone. The same will happen to smartphones, and the fact that Google is accelerating this trend, because they frankly don’t care about profit and would rather break even, is something to be excited about.
Whether you’re a consumer, an operator, or a developer looking to sell apps, Google executing on the vision Nokia has been talking about for the better part of the last half decade is a welcome thing.
[Image Credit: TechAdvisor]
Update: For those who want to watch the Moto G press conference, it’s only 31 minutes long.
I wrote this post for this week’s Bizcrowd newsletter and thought it might be useful for a few readers here at Mobile Industry Review. Creating a partnership is fraught with difficulty. I’ve seen many work fabulously, but I’ve also seen a lot of poorly matched partnerships descend into business hell. I put together 10 questions that you might want to ask a prospective business partner before you sign the paperwork. All of the questions are derived from bitter experience!
Here’s the first section:
Some of my worst business experiences have come about because I didn’t have the confidence to start a business on my own. It’s quite difficult to admit this and writing it down in black and white makes it look even worse.
I’m an entrepreneur and I have been since my very first Tuck Shop business aged 15. Watch me striding across the stage as I present the Bizcrowd Award at the upcoming Great British Entrepreneur Awards and you wouldn’t think I’ve ever lacked for confidence. But the sad reality is that every early business I founded was with a partner because I simply couldn’t summon the courage to go it alone.
I was literally kicking myself when, both aged 21, my partner and I were offered half a million pounds each for our business from an international investment bank. He disagreed. He didn’t like the idea that the acquisition required him to take a step back. I had to politely decline the offer that would have made me before I’d even finished University.
Continue reading over at Bizcrowd.
Thank you to all the readers who came along to World Travel Market’s Mobile Travel Panel yesterday afternoon. If you recall the topic was, “Desktop is dead! Long live mobile travel!”
Andrew Cocker, Chief Marketing Officer of Skyscanner gave a stimulating presentation for the first 25 minutes. He included a load of statistics and perspective, some from the wider travel market and some from Skyscanner’s own internal research. It’s always useful to be brought up to date with the wider industry, however I think the audience really appreciated the insight Andrew offered from Skyscanner’s own experience. Afterwards, I thanked Andrew for being so candid and direct — I think his approach was very much valued by the audience. Indeed, Andrew was mobbed by the audience afterwards.
The panelists, Ben Smith from Wireless Worker and Rafe Blandford from All About Windows Phone were characteristically excellent too. Ben, Rafe and Andrew spent about 35 minutes kicking a wide variety of issues around, asking their own questions whilst taking lots of feedback from the audience.
The major thrust from the panel was, I think it’s fair to say, ‘get with it’ — that is, mobile is definitely here. Rafe was particularly bullish, urging the travel industry to invest now to ensure they can collectively meet the growing demands of a mobile first travel world.
Thank you to everyone who came along!
Over the last half of the year I have become increasingly frustrated at the service level Vodafone have been offering on my iPhone’s 3G data connection. It’s been really difficult to get much done without depending on WiFi. It was so bad at some points that I was mentally planning my data communications according to the pubs and restaurants on my walk to work — because I knew when I’d have BTOpenzone or The Cloud WiFi connectivity. Ridiculous, really.
So when I upgraded to a 4G sim, I was metaphorically holding on to the desk with both hands. I was particularly nervous to discover whether Big Red had pulled one out the hat.
I’m pleased to say that wherever I’ve got 4G (London, mostly), the speed is excellent. I haven’t bothered with speedtests. It’s all about the actual usability for me. I am finding Vodafone’s 4G service to be comparable to that of EE, judged purely on my own perception.
I still make far more use of my 4G service from EE, but I am now able to use my iPhone sensibly. In meetings, it’s really nice to be able to quickly check email.
I can’t quite believe I’ve had to even write that sentence. This serves to show just how rubbish the 3G speeds had become. It felt like Vodafone has put all energies into the 4G network and left the tens of millions of 3G customers having to make do.
Still, it’s working now and I’m pleased. If you’ve got the opportunity to upgrade — and you’ve been getting frustrated with 3G on Vodafone, I do recommend getting an upgrade to 4G (provided you at least live or work near their 4G network).
Here’s the answer: Bizcrowd. It’s the NatWest/RBS powered B2B community aimed at small businesses across the UK and beyond. I took over running the service in May and it’s been a bit of a whirlwind. As you might have noticed it’s not left me much time to rant about the state of the mobile industry recently.
I thought some readers might like to get a peek at the service — it’s free to use and it’s for anyone, not just NatWest/RBS customers. If you own a small business it could be really, really useful, especially for finding leads, new customers and suppliers. I’m particularly pleased with the Marketplace that we launched earlier this month. It features a ton of stimulating offers from a wide variety of small businesses. I bet there’s at least one in the list that’ll get your interest!
Did you catch the Bizcrowd television advertisement? Have a quick watch of the 30-second piece and it’ll give you a briefing on what we’re doing. Here’s the YouTube embed:
Standby for more mobile ranting soon.
Today I’m speaking at World Travel Market 2013, the world’s largest and very best travel exhibition hosted at ExCel London. This will be the third WTM I’ve attended, if memory serves. Last year was a blur of meetings, videos, interviews and ridiculously late nights. I should definitely have booked a hotel.
This year is a little more civilised!
I’m hosting the “Desktop is dead, long live mobile!” seminar. It’s taking place in the South Gallery Rooms (15 and 16) from 3.30pm-4.30pm. The seminar with feature a presentation from Andrew Cocker, Chief Marketing Officer of industry success story Skyscanner, followed by a panel discussion featuring mobile luminaries Ben Smith (Wireless Worker) and Rafe Blandford (All About Media Group).
Yes. I’ve managed to rope them in! I’ve managed to get them in one place. Goodness knows how I’ve done it! Andrew is usually on a plane flying over China or America, somewhere. Blandford is rarely in the country at the moment being flown around by countless leading mobile device manufacturers wanting his opinions and I am routinely getting emails from Ben when he’s on a military base consulting for some very serious people somewhere in the North American tundra.
I’ve seen the first draft of Andrew’s Skyscanner presentation and it’s a corker. It will explain the mobile trend that is sadly not resonating with many in the travel world quite yet. There’s going to be a bloodbath at some point given the amount of business that depends on middlemen who (for better, or worse) will be erased by new technology. Witness, for example, buying a ticket for a theme park, or booking a taxi to the airport — most of this business goes through third-fourth-or-fifth parties before it gets to the consumer at the moment. That’s all set to change when you download the theme park app and buy directly.
After Andrew’s presentation, I’m going to ask him to join Ben and Rafe for a panel discussion on the mobile travel industry. I’m particularly excited to be able to expose the travel world to the minds of Ben and Rafe. Having them spar together with Andrew is going to be a sight to behold. But it’s not just about the panel, I’m hopeful that the audience will deliver countless challenging questions and comments.
If you’d like to come along and watch, you can. You’ll need to be super quick though.
Location: ExCel London, South Gallery Rooms 15 & 16
Registration link: here (free)
Now, registration is free of charge — provided you register *online*. If you turn up at ExCel in the Docklands, they’ll charge you £55 +VAT for entry. Theoretically you could potentially register online as you’re standing outside… with your mobile or tablet… but don’t quote me.
It would be excellent to see you there.
You can follow World Travel Market at wtm_london.
Anyone using Hailo today will have seen what I’ve just seen — a Halloween inspired Hailo figure. Nice touch!
I was at a big AirWatch mobile device management (MDM) pan-European pow-wow last week. At it were CEOs, MDs and reps from Multinationals whose brand names are the stuff of the daily papers. In amongst them all were small firms, AirWatch’s channel partners and consultants like me who had some spare time on their hands.
Personally I like AirWatch: for their product, for their management style and especially for their in-house pre-sales and professional services team. I have used the software extensively and I have a lot of time for it. However, I think there is a problem specifically with MDM and the whole mindset that drives its adoption. I am not alone in this, and it is from a presentation at the conference by Chris Marsh of the Yankee Group that my current train of thought left the station.
The basic ambition of a pure MDM implementation, and in the rush to go mobile this is all that many firms have in mind, is that you can remotely control the mobile device from a console on a corporate server over the wireless networks. For Apple products, the server sends an Apple Push Notification Message to an MDM enrolled device which says “call home”. The device does and receives, by return message, an OS interpretable instruction such as “lock screen”, “clear password”, “install this app” or “reset the device to pre-enrolment status”. The device does what is requested if and when it can. Generally it reports success or failure back to the server but, say with reset message, executing the message necessarily involves clearing all of the enrolment server information including knowledge about where to report back.
What MDM can do is determined by what the list of message types the OS supports. Some MDM vendors provide an “agent” to augment the over-the-wireless services but given modern OS sandboxing and security models, the additional services are fairly circumscribed. Android supports a vaguely similar model and has a slightly larger set of controls.
The problems with MDM aren’t about its aims or implementation but, as with so much off-the-shelf software, the devil that lies within the detail of the operational manual that you must write for your L1 and L2 support teams. You can use your corporate console in the IT lair to do location tracking of all of your enrolled devices. It works and is an extremely powerful feature of MDM’s abilities. You can wipe clean the contents of the device’s storage with a press of a button. But when can you use these features, and their raft of companions, once you have implemented them? The examples below are not drawn from dreaming about a brochure-ware MDM implementation but from war stories from those who have done it.
Tracking employees’ location generates very large volumes of discontent. I cannot think of any organisation in which I have worked where employees would or did accept it. I can name even more organisations in which I have not worked that also have not accepted it. Apple’s micro-location service for devices that are never meant to leave the building would be acceptable probably because the feature confines its benefits for the business to within the geographic bounds of the business.
Wiping a device, especially a corporate owned device, when it is stolen seems a bit less contentious but on closer inspection it too has problems. Can you guarantee that, just because you press “wipe”, that the radio message will traverse the radio networks and the device will actually get the signal and complete the execution of the command?
If the fact that you cannot guarantee this doesn’t really bother you, and I can accept any number of reasons why, I imagine you don’t have any of your clients’ data on there about which you have critical business agreements to the effect that you won’t lose it.
For many businesses, losing client data to random third parties through loss or opportunistic theft might be acceptable provided there is a passcode and data encryption in place. At some point you need to do a risk assessment, set a budget for insurance and a plan for mitigation then act accordingly. However, what if the employee has personal or business data on the device, the continued existence of which is legally required by the courts and, although the device remains in the employee’s custody, it is wiped anyway? It may seem like a fringe case but I know of two large and extremely reputable companies that will not wipe a device without the express consent of the device’s owner because the devices can hold data relevant to regulators or to disclosure/discovery pre-trial phases of court cases (99.99% of the time they don’t, but these companies operate in industries that are unsympathetic to these kinds of errors).
The fact is people who work in a mobile way have data of real value on their devices and as, over time, the true internal/external business value of that work style develops, this data simply must not be wiped without due diligence.
My point isn’t that these fabulous features of MDM (as well as being able to set a password policy, black list apps etc) aren’t useful because they are. They should be thought of as small dots in the bigger picture of the policies and procedures you need to put in place around them. As the mobile picture continues to get bigger these dots will continue to get smaller. Or to use another analogy, MDM presents a range of tools that make every mobile problem look solvable in exactly the same way that a person given the use of a hammer sees every problem as a variety of nail.
So how do you develop a mobile strategy that is robust, encourages employees to get the full benefits of the technology, can be managed by the L1 team and will work in the general and fringe cases?
The trick is to have extremely strong business-led procedures around the devices. You can’t setup operating rules around using the device that are unreasonable to the employee because you can’t place any unreasonable restrictions on employees. Even if you have a clear idea of what is reasonable and unreasonable, make sure that your HR department agrees with you. Employment law (which is what this boils down too along with unfair or constructive dismissal) is not always sympathetic with headline features in the MDM tool set. You also can’t write L1 operations procedures which are too “reasonable” (aka nuanced) if your L1 team, along with a large percentage of your company, has English as a second or third language.
So rest assured that it can be done.
The most important step is to follow Chris Marsh’s advice and break the task down into two parts: device management is asset management; data management is best handled through encapsulation.
I mostly consider MDM a solution for corporately owned devices. Some non-corporate devices that need to access the corporate network, such as those owned franchise holders or sub-contractors, will possibly have their own MDM solutions already in place. Even employee owned mobile devices enrolled in personal MDMs will probably start to show up in work places before too long. You can’t enrol a device into two MDM systems concurrently. Asset management isn’t just about ownership of a device. Many of the asset management facilities of MDM can be still be implemented if you think your way around them hard enough and your vendor’s product supports what you are trying to do.
Anyway, for asset management try a two-pronged approach. Most importantly, use relatively few of the traditional mobile OS supported remote management features MDM supports. Choose your set based 100% around how your service desk team can be asked to use them. Maybe write your L1 and L2 manual around your use cases and then track backwards – whatever works for you.
In parallel, work out how to tie MDM into your asset management systems and configuration management database. It doesn’t hurt to read all of the L1 and L2 tickets every week and see if requests are coming in from employees that are being misinterpreted, escalated to L2 or L3 or related to functions you elected to leave out. It may save the service desk group quite a bit of money, in light of these reviews, to rewrite the knowledge base, adjust the MDM functions available and move some roles around if you find out you were wrong in your early analysis.
Next, if you can arrange a feed into your MDM setup from your asset ordering system, you can use MDM to send out mobile device enrolment information to staff as their corporate owned devices are delivered to them and then make sure the serial numbers match when they enrol. In jurisdictions where it is important that communications originating from corporately owned are fully managed (one of the deal breaking issues in the US in certain industry sectors) this can ease a lot of conversations with mobile skeptics.
Even better, if you can use MDM to dynamically update your CMDB with any company software that is installed (a good MDM system will be able to tell the difference between company managed and privately installed software) , then you can track licences using your company’s normal tool. There is no need to extend your general IT licence management processes to handle yet another exception, in this case for mobile devices, because MDM becomes merely an information source for your system of record. Essentially you can use MDM as a hub that incorporates mobile devices into your standard asset management toolset. The API of systems like AirWatch (using REST) are getting stronger all the time and this sort of integration is part of their product plan. I am sure that MobileIron, Mass360 and SAP’s Afaria (among all of the rest) are developing along similar lines.
How to manage encapsulation as a way of managing data is another step up in sophistication. Its benefits and techniques are useful equally on corporate owned devices as on BYOD.
Thus it deserves its own article, so stay tuned.
Hello it’s Ewan here. I’m delighted to present a series of posts by one of the Square Mile’s most accomplished mobile architecture hotshots, Julian Cooling. Julian has been a regular comment contributor over the years here at Mobile Industry Review and I finally met the chap in person at one of our 361 Degrees Live Podcast events earlier this year.
I do remember buttonholing Julian and demanding he spread the word about the reality of BYOD, mobile device management and so on. There’s only so much hyper positivity I can take from the myriad of vendors. I want to know what it’s really like deploying BYOD/MDM (et al) to hundreds (or thousands) of users, particularly in the financial organisations in and around the City.
Julian’s our man.
Standby for an insightful brain dump of experiences, perspectives and opinions forged in the utter stress of get-it-done-delivery. I think many readers will get a heck of a lot of value from Julian’s experiences. He’s got the scars — alongside the confidence of one who’s consistently delivered for clients.
We’re kicking things off with everybody’s perennial favourite: Bring your own device.
Over to Julian….
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In the last six months I have read much wordage about Bring Your Own Device in the enterprise, including Gartner presentations saying 60% of all firms will be 100% BYOD by 2017. Having actually had to put the policy and infrastructure together for what could be described as a large multinational, I think there is gap between what the experts are glibly saying and what BYOD project managers need to be working through. Personally, I don’t think that the public discourse is being controlled by anybody who has had to chat with a corporate lawyer, compliance and risk officer and global telecoms account manager once a week for the best part of a year.
Failure of Imagination #1: BYOD will allow you to shift costs so get this driver right!
Nearly everything I read about BYOD has, at its dark heart, a corporate culture which has an allergy to capital expenditure (Capex) and a corresponding love of operational expenditure (Opex). There are tax and accounting reasons for this and corporations ignore them at their peril. However, article after article, even when it isn’t explicit, assumes that the Opex (including call and data costs) is the company’s problem and the Capex for the device can at last be shunted off to the employees. This can be tarted up into several hundred words — but this is when many analysts’ visions for BYOD stops.
Some analysts suggest all sorts of ways to manage the Opex but, quite frankly, if you are considering BYOD and the breakdowns between Capex vs Opex are the only things on your mind, move on and come back after you have worked out what mobile means for your organisation. The practicalities of making BYOD work will have an impact on your spreadsheets but the realities of BYOD mobility over the next 5 years will have a much bigger impact on business: so get that right as your priority, kids.
They’re Dreamin’ #2: Click through Terms and Conditions are really important.
A basic rule is that you cannot enforce a “contract” if the other party cannot say “no”. Nearly every BYOD analyst’s dream scenario shows BYOD as pretty much compulsory for all applicable employees. This is fine, but that does mean that any Terms and Conditions the employee agrees to must, essentially, be pre-agreed HR policy because the employee will be implicitly (or explicitly) compelled to click “yes”. The T&Cs are unenforceable as “an agreement” or as “a contract” since the employee was forced to agree so they could keep their jobs. Nevertheless, they can be a useful reminder to everybody of the rules for mobile workers in the company. Carefully consider the feasibility of writing the mobile T&Cs into the employee contract/HR manual and then reference them via a hyperlink in the T&C box to which the user clicks “OK” as acknowledgement rather than agreement.
More specifically: on day one of the BYOD project, treat 90% of it as an HR, compliance and legal problem. The actual technical deployment will account for the other 10% (I exaggerate). Your top priority should be getting this sort of paperwork started before you unwrap any hardware or software.
Didn’t See that One Coming! #3: Data Leakage Prevention Technologies, Client Identifying Data and “We have the technology”.
Containers, 8 character passwords with 2 letters and an exclamation mark, secured apps, FIPS compliance and 256 bit encryption are all good things. However, what device are your teams using to call your customers on?
Think carefully here!
Where are the missed return calls, call logs and such things being stored? Even if you put Contacts, Calendar and Email in a container/secured app, the employee’s personal phone is still going to be used to make the call.
You cannot ask your workers to use their own phones without considering how deeply your Data Protection Policy may be undermined. And it is unreasonable to ask you employees to clear out their call logs on their personal phones when they leave.
Also, every decent sales employee is going to work out how to download the entire customer relationship management system (CRM) into their BYOD device on day one. Illegal? Possibly; Unethical? Probably; Against the T&Cs? Yes (if you have squared away with your HR team) — but these are people your firm hopes can close the deals that make real money: They are not 9 to 5 workers for the local Sunday School. They often hold unfortunately realistic expectations that they will get kicked out within a week of starting (through no fault of there own) and so the unified contents of all of the CRM systems of all of the places they have ever worked is one of the ways they can bring new business into the next shop who hires them. Life can be rich in sales but it is tough too and your BYOD systems need to be realistic about the life experiences of the people whole will use them.
Maybe you manage to lock down your CRM. In the end, though, if you are asking people to use their own phones to call customers then be aware of this issue.
Doing it Right
Obviously, BYOD without the phone is a whole lot easier than with it. In many industries in Central London it is illegal (as in “go to jail” illegal) to call clients on a phone unless the call is recorded and the logs kept for 7 years. However, in these companies, there will be masses of other people will have to negotiate complex products, organise events, work on road-shows etc and they must use a mobile. There are ways.
Cunning Plan #1: BYOD – The Clue’s in the Name: it is their own device
The first thing to remember is that the device belongs to the employee, as does the version of the OS, the OS licence, their device replacement insurance, their choice of screen pixel density and screen size. You are just asking for space on it’s storage, a few CPU cycles and some time on its radio aerial. The more you can keep your footprint on the device nicely contained, the better it will be for everybody. If you accidentally even think about randomly making use of the additional device features you are doomed.
Think encapsulation and then encapsulate every service you want to from that device and its OS.
A lovely side benefit is, because you don’t fiddle at all, the employee can support 90% of what they do by using Google and/or their children. It causes no angst because they know it is their device and if they break it they fix it. One reason IT departments have had to support corporate phones so heavily in the recent past is they weren’t ever really consumer devices with proper Google support and then subsequently they were customised beyond recognition and/or usability.
How to Win Friends and Influence People #2: Choose your mobile delivery partner
Containers vs secure apps vs MAM vs MDM can send most intelligent people into a spin. However, some of the big MDM/mobile technology vendors can support your mobile enterprise requirements quite intelligently. Indeed, you can:
* Direct all company data in your apps via your servers (either via per-app secured channels, VPNs or other tricks)
* Support voice over IP and run that back through your own SIP/VOIP servers (whoo hoo — phone services which meet regulatory requirements!)
* It’s the apps, stupid. If you need a service or function device, encapsulate it in an API that you manage and use it to build your apps.
* Deploy your apps directly on the device “desktop”, into a container or a bit of both (depending on what is implemented on your OS, by your mobile support vendor’s technology stack etc etc etc)
It gets more complicated but you may be able to count bytes in and out of devices. If you get clever, you might possibly even calculate a per byte cost (with weightings for roaming and WiFi) and come up with a fair compensation model for your employees. I am not saying it would be easy, but nothing about this is easy. What will shift it from impossible, is your choice of mobile support software vendor. There are some very good ones out there.
Aligning the Stars #3: BYOD is an HR policy not an IT policy
In BYOD circles, there is way too much talk about what your IT security department will say about BYOD and not nearly enough about the views of your Business Risk and Compliance, Legal and HR departments. This is a huge, huge issue.
Penetration tests are important but they are also well understood by anyone who is actually project managing a roll-out like this.
Questions regarding the circumstances that can lead an employee to an accompanied visit to the Southwark Crown Court and what deals the Criminal Prosecution Service might offer are similarly important. An astonishingly few people in an organisation actually know who to ask in order to find out.
And the answers can be very subtle: Some people can leak information freely (public relations!), others will be subject to civil penalties, another group may be subject to criminal sanctions if anything goes wrong and you may find there are departments or groups that are audited hourly. It depends where you work, but find out early and check often.
If the company staff policies need updating, you can pretty much guarantee it will take the full length of the project to get the paperwork through even if everybody agrees.
If a union is involved that will be fine too, but again it isn’t an IT problem no matter which MD is sponsoring the project or who paying for it or how the Return on Investment is calculated. So give HR and their associated departments every possible day the project has before the solution must be turned on.
My Take Home Message:
BYOD is lovely. It may save money, it may not. What it will probably do is transform your employees from desk bound, technology bound people to a far more flexible force where they own their own tools and can treat them as physical manifestations of their other skill sets: i.e. as their own.
This means a BYOD project is not a “technology enabler” such as an Exchange Server 2010 rollout, migrating to SAP or dishing out corporate mobile devices. Instead it is about a controlled and limited transfer of agency and IP from the company to the employees.
The issues you face are not driven by the technology per se, but by the HR, legal and compliance issues relating to such a transfer — not that anybody in the armies of online commentators, paid analysts or company leaders really gets this.
As an project manager on the job, you just have to wink, smile and pull something out of thin air and make the mandatory quip:
“Encapsulation? I have an app for that”.
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Hello it’s Ewan again. Genius, Julian! Absolute genius. Thank you very much indeed for taking the time to contribute this.
If you’ve any questions at all — or comments — please, please do contribute them below as I think the could be very useful to everyone in the wider community, particularly those who’re about to embark or in the middle of a BYOD programme.
Thank you once again Julian! I’m looking forward to your next post.
You’ve heard of the Homebrew Computer Club, right?
Jobs, Wozniack and so on? They all got together there. The Personal Computer revolution all started there. Sort of. You know what I mean
Michael and his colleagues have got together to arrange a reunion. No reason. Just because. Just because it would be cool. Woz will be there. He is giving a talk along with Ted Nelson of Hypertext fame, as well as Home Brew originals Lee Felsenstein and Gordon French.
Michael and his colleagues hit their $16,000 funding objective in what seems like seconds. No wonder. I’d have signed up and gone along, if only I was on the West Coast.
All the cool stuff still happens there
Take a read of the Kickstarter listing and standby — they’re currently only $3,500 from hitting their $40k stretch target that will see them produce a video of the evening.
I was reading The Times this morning looking for Bizcrowd ads. I can’t quite remember the advertising schedule we’re operating with the media. I have it written somewhere in a spreadsheet and I routinely keep getting the days and newspapers wrong. So today I bought The Times. I
scrolled paged through the paper and didn’t find anything from Bizcrowd. It must be tomorrow.
But I did come across this thoroughly stimulating BlackBerry ad. I tried as well as I could to capture a photo of it.
I hoped they’d reproduced it online so did a quick search and came across it. The add is full text, no imagery. It reminds me slightly of those Jack Daniels posters you often see on the tubes. The ones that I like to read. I think we all do. Reading a bit of well written copy does pass the time when you’re waiting for the tube.
BlackBerry’s Open Letter is excellent. Here, have a read:
To our valued customers, partners and fans:
You’ve no doubt seen the headlines about BlackBerry®. You’re probably wondering what they mean for you as one of the tens of millions of users who count on BlackBerry every single day.
We have one important message for you:
You can continue to count on BlackBerry.
How do we know? We have substantial cash on hand and a balance sheet that is debt free. We are restructuring with a goal to cut our expenses by 50 percent in order to run a very efficient, customer-oriented organisation.
These are no doubt challenging times for us and we don’t underestimate the situation or ignore the challenges we are facing. We are making the difficult changes necessary to strengthen BlackBerry.
One thing we will never change is our commitment to those of you who helped build BlackBerry into the most trusted tool for the world’s business professional.
And speaking of those dramatic headlines, it’s important that we set the record straight on a few things.
Best in Class Productivity Tool
We have completely revamped our device portfolio this year with the launch of BlackBerry® 10. We have four BlackBerry 10 devices – two all touch and two hybrid (touch and QWERTY) – and all are running the third update of our new platform. If what you care about most is getting things done – taking care of your business — we have the best range of devices for you. And we continue to offer the best mobile typing experience – no ifs, ands or buts about it.
Best in Class Security
Governments all over the world, global corporations and businesses that simply cannot compromise on security choose and trust BlackBerry. Security is our heritage, and the industry recognizes that BlackBerry is the most secure when it comes to the device, server and, of course, our global data network. Have no doubt that you can continue to trust us to keep your communication safe and private.
Best in Class Enterprise Mobility Management
We changed with the market, embracing BYOD because we understand that as iOS and Android™ devices become common in the workplace, businesses still need to manage all of these different platforms seamlessly and securely.
This is not a trivial task. While there are a number of startup companies that make bold claims, BlackBerry has more software engineers and the most resources dedicated to developing the most innovative solutions to address this complex challenge.
And our customers know it. Over the past quarter, our BlackBerry® Enterprise Service 10 server base grew from 19,000 to more than 25,000. Corporate clients are committed to deploying and testing the latest enterprise technology from BlackBerry. We are committed to evolving with our customers. That will never change.
Best in Class Mobile Social Network
We are bringing the most engaging mobile messaging platform to all, with our BBM™ launch for Android™ and iPhone. There are already around six million customers pre-registered to be notified of our roll out. This number is growing every day, and speaks to the tremendous opportunity we have to expand BBM beyond BlackBerry® smartphones to make it the world’s largest mobile social network.
Yes, there is a lot of competition out there and we know that BlackBerry is not for everyone. That’s OK. You have always known that BlackBerry is different, that BlackBerry can set you apart. Countless world-changing decisions have been finalized, deals closed and critical communications made via BlackBerry. And for many of you that created a bond, a connection that goes back more than a decade.
We believe in BlackBerry – our people, our technology and our ability to adapt. More importantly, we believe in you. We focus every day on what it takes to make sure that you can take care of business.
You trust your BlackBerry to deliver your most important messages, so trust us when we deliver one of our own: You can continue to count on us.
The BlackBerry Team
This is precisely what the company has been needing to do for quite a while. In fact I would go so far as to state that I think this will have been a more influential campaign than anything the company has done in a long, long time.
Speaking to the reader as an adult is important.
For far too long the focus has been on everyone. Anyone. I hope this is the start of a refocus for the company. A focus back on the real customer: Someone who spends a bit of money. Someone who cares about security and a best-in-class messaging experience.
I do feel that it was quite easy for BlackBerry to focus on the consumer, especially once they’d got into the groove of manufacturing such capable smartphones but at an ultra low bill of materials. In some interviews with executives in years gone by it did feel at times as though they’d fallen into the consumer success that the company enjoyed.
It’s a rather challenging time for BlackBerry customers and fans — and, I’d imagine, this challenge is magnified dramatically for the individuals working at the company, especially in the wake of more cost cutting. When you’re spending your hard earned ‘operator credit’ on the handset for the next 24 months, it’s unlikely that BlackBerry will be at the top of a lot of lists. This is despite a good, sizeable presence in most operator stores in the UK.
My response to the ad was a big smile. I felt a lot better about BlackBerry that I have done in a while. It’s been difficult not to conclude that really, it’s time to wait-n-see. Taking BlackBerry private is a smart move. An acquisition by an existing mobile company could be really stimulating. But to all the folk who shake their heads, especially in the big banks. FTSEs, law firms and Governments who flatly tell me BlackBerry is dead, I still delight in pointing toward the pile of phones on the table. Invariably there’s a top of the range iPhone, Android (or, increasingly, Windows Phone) sitting there. But right next to it, if you’re important enough, there’s a BlackBerry.
“That,” I say, pointing at the BlackBerry — or sometimes I pick it up and thrust it into the face of the person, “That is earning a monthly recurring revenue fee via the operator.”
When the person’s face changes swiftly to recognise that I’m right, I then ram my point home.
“Who’s the money going to?” I prompt.
I then usually have to follow up explaining that obviously there’s a revenue charge taken from each BlackBerry service / license by the operator. Often there might be a third party service provider in there too. Ultimately though, there’s regular subscription revenue flowing back to BlackBerry on a monthly basis, particularly from the big corporates.
The points that each of the paragraphs in the open letter are well made. Addressing the ‘headlines’ was important. Highlighting the company’s heritage in the messaging space, together with the need for demonstrable, proven security. I liked the part about the world-changing decisions being transmitted via BlackBerry. But mostly, I liked the way in which BlackBerry appears to have found a sensible, steady voice.
Whoever masterminded this, give them a big prize.
For those who don’t care about BlackBerry, the open letter will be of little consequence. That’s no problem. You can worry about winning those folk and bringing them along later on. It’s the people who stopped flicking through the newspaper or the internet that matter. The people who thought, ‘Yeah, hold on let me have a read of this.’ They’re the ones that BlackBerry needed to reactivate.
Well, it wasn’t even a reactivation.
There’s not much news. Yes they managed to explain that there are 4 current BB10 models out and available at the moment however there’s not much in the way of company strategy news going on. Not whilst the company’s in the middle of being taken private. Maybe. We just don’t know what’s going to happen across the next few months. Neither does BlackBerry, I’d imagine. But that shouldn’t — and didn’t — stop the company communicating.
It was a good reminder.
I hope BlackBerry does another letter soon. When is the second Open Letter coming? “Dear Reader, last month we wrote to you about…”
That would rock.
Now then, is this enough to have you walking into Vodafone to chuck your iPhone? Perhaps not yet. But in the corporate sphere, where decisions about what to do about ‘the BlackBerry problem’ are being taken on a daily basis, the open letter has been well received. I’ve already spoken to four chaps, each of whom is responsible for, or closely influences estates of between 2,000 and 5,000 BlackBerry deployments here in the UK. They are uniformly positive. They’re still looking at other solutions — even BlackBerry’s Open Letter recognised that many users have other preferences nowadays — but today’s letter has given them a much needed shot of confidence that the lights are still on in Waterloo.
A question that is bothering me. I walked by the EE store in Islington this afternoon and saw this sign outside:
Isn’t that meant to be impossible in the first week of an iPhone launch?
… you should check out this week’s 361 Degrees episode.
This week we’re talking about Nokia and Microsoft.
I have been a long time Nokia fan — and a long time commentator. I have followed them through thick and thin. I’ve been hugely complimentary and supportive — but I’ve also been intensely direct at times across the years. I’m sure I’ve used phrases like ‘utter b0llocks’ and so on. Routinely.
I met — and know — a lot of smart people who worked for the company over the years. So when the company called it a day and handed the keys of their Devices & Services division to Microsoft, I did stop for a moment and think about all the fabulous memories.
Some of the company’s handsets are absolutely iconic. The Matrix phone. The N95 — the ‘multimedia computer’ that really started the smartphone world, in my view. The Communicator series with their fold-out-amazing-speakerphones. The E51 qwerty. Ah there are tons. Oh, don’t forget their dedicated camera and video phones. The N90 and N93? Loved them.
If you think I’ve got memories, imagine, dear reader, what Rafe Blandford was going through last week.
If you’re an occasional reader you’ll probably have seen the odd reference to Blandford now and again here on Mobile Industry Review. We record the (more or less) weekly 361 Degrees mobile podcast together (along with Ben Smith). And we’ve done lots of things together over the years — from joint sponsorship features to video interviews, panel discussions, the lot.
He’s a very good friend, Blandford. Together with Smith, we get on rather well — so much so that we’re now on our FIFTH podcast series with tens of thousands of listeners around the world.
Those listeners can actually follow dozens of hours of audio back to early 2011. Many of them have been with us from the first episode. And they’ll have very quickly got the message about Blandford: He bleeds Nokia blue.
Blandford is founder of the almighty All About Symbian. In it’s hey day, AAS (as the *millions* of users refer to it — I shit ye not, millions), the site was the number one source for anything Symbian and Nokia related. I used to enjoy watching Nokia employees wanting to get their photo taken with the highly embarrassed Blandford at various different industry events. Of course the fortunes of AAS rose and fell with the great NOK. Although it still attracts a huge, huge amount of readers, Rafe’s attention switched about two years ago to All About Windows Phone. Many of his legions of followers made the leap and he and his colleagues attracted legions more new readers, desperately devouring what many in the marketplace consider amongst the best possible industry analysis and device reviews.
Throughout the years I’ve had Blandford on Mobile Industry Review TV and on all sorts of panels, discussing Nokia. He’s steadfastly and resolutely defended them. Where he judged it necessary he’s been critical — it was always a cold, cold day in Finland, whenever Blandford ‘made his point’, politely, justly and with elegant analysis. He left it to me to — as he coined it, ‘to put the bile in mobile,’ with my commentary. Thanks Rafe
So, how do you think Rafe reacted to the news of Microsoft’s Nokia acquisition?
Given his loyalty, given his investment in AAS and AAWP? What do you think he felt? How do you think he rationalised it?
Well, dear reader, we’ve got it on audio.
We sat him down a few days after the news and fired questions at him. I think at one point I demanded he dispense with the polite commentary and tell us what he felt.
And given it’s 361, I pressed hard. Both Ben and I did. I think at one point I did a Paxman and asked him if he felt responsible, in a small way, for the news. My rationale was that he robustly defended Nokia at every stage. Partly because he was so obviously a fan, sure — but also because his knowledge of the company, it’s operations, it’s logistics, was second to none. He was able to do a far better job than any of their PR team were allowed to. Especially when I was pummelling Nokia on stage during a panel. Blandford would stare at me with a degree of pity, take a few breaths and then deliver a 3 sentence put-down/explanation that I — and the audience — would find it difficult to counter.
And given his substantial influence, I wondered aloud, if Blandford had been more direct with his criticism, would the upper echelons at Nokia have taken notice quicker? (Make no mistake, his writing was regularly distributed around the leadership teams.)
What do you reckon? How do you think Rafe responded?
And what about the future? Can Microsoft hack it? Can they handle Nokia? Or is this the beginning of the end for absolutely everything Finnish-related?
And how does Blandford feel now that he will never, ever pick up a new Nokia handset?
Have a listen. It’s a thoroughly stimulating episode if you’re even half interested in the issue of Nokia and Microsoft.
Here’s the Soundcloud embed:
Have you been seeing folk with Samsungs Facetiming in the street?
I am routinely witnessing this almost daily in and around London.
I was in Scotland the other day on business and one of the ladies ahead of me in the taxi queue at Edinburgh Airport flipped out her S4 and proceeded to say goodnight to her children via video call. I glanced quickly enough to see she was running on 4G (and, I think, EE).
The other day I walked toward Islington tube station and was astonished to see a young twentysomething speaking with two of her friends via video call.
She was holding the phone up — as you do — and doing the whole thing, without any embarrassment or hesitation.
I’m a regular Facetimer, especially if I’m staying up in London or abroad as the children really like it. However I try to keep it private as it’s been my experience that normal mobile users — normobs — still aren’t that comfortable with folk doing it in public.
Witness this post I wrote back in 2011 (“Facetime is still absolutely astonishing for the lay person“).
The interesting thing, though, is that they’ve all been Samsung users. I checked. I haven’t yet seen someone in public doing a Facetime with an iPhone.
Have you seen video calling happening more often in your area? Or is just me?
Good news! If you are Ben Smith, then you will be loving the all new “Feel at Home” facility from UK operator, 3.
This means he routinely goes there for the weekend. In fact he’s that organised that I think he’s booked his Ryanair flights for the next 6 months already. He’s also a 3 customer. And now he won’t have to bother with roaming charges — because with “Feel at Home”, he can call, text and get online at no additional cost. His existing domestic 3 service plan applies in Ireland and 6 other countries (Austria, Australia, Denmark, Hong Kong, Italy and Sweden).
It turns out that Smith is also off to Italy on holiday shortly so he is rather happy.
He’ll be able to avoid the somewhat expensive roaming costs that still apply in Europe — and the prohibitively stupid roaming costs that normally apply in Australia.
A good few years ago, 3 used to do this. They called it “3 Like Home”. I thought it was brilliant. I used it in Italy a few times.
Then they canned it. David Murphy over at Mobile Marketing Magazine picked up the closure story a whopping four years ago.
Back then, ‘free’ roaming on 3′s sister networks was extraordinary. It was a real shame they switched it off. The network’s PR team did their best at spinning it, but I felt it was an error. Roaming has been such a hot topic over the past few years — enough to compel the EU to legislate — that 3 would have been held as a cut above the other networks thanks to their sister-peering arrangement. Indeed I’m sure it would have been particularly difficult for other networks to justify why they didn’t offer sister-network peering when little old 3 did.
By coming into line with the other networks, 3 was relegated to also-ran at the back of the class and they were especially late to offer roaming packages.
Anyway, it’s back. All 3 customers are automatically enrolled so you don’t need to opt in.
And if you live, work or have family in any of the 3 sister network countries, it would probably be worth you swapping to 3 to take advantage of Feel at Home. More details from 3 here.
So the latest set of iPhones will hit the market later this month. There will be queues. There will be slightly tame excitement. There will be headlines about millions of devices flying off shelves.
A few readers have been asking where the hell my opinions have been, given the launch took place 48 hours ago.
I have to say that I’m suffering dramatically from lethargy when it comes to Apple at the moment.
It’s pretty bad. I’m sorry to say that all I could manage was a slight raise in my eyebrows at the basic news. At the price point announcement I had to smile briefly and nod my head.
It would have been quite fun to see how a £199 iPhone 5C would have performed in the market. Apple’s focus is clearly on retaining a higher margin and higher quality customer who’s more likely to be prepared to buy more from the Apple ecosystem. One of the challenges with folk buying £99 or £199 phones is that they, by definition, are a lot more careful with their money.
The rough 80 pounds/dollars/preferred-currency-unit difference between the 5C and the 5S devices should probably make it easy for most Western operators to offer the 5C free on contract. Sensible. The plods like me who like to buy the ‘best’ will still chuck up the extra either upfront or to buy the device outright.
Oh I’ll buy a 5S.
But just because I’m not that enamoured with anything else.
The finger print sensor? Nice.
Meh. It’s certainly smart technology.
I can’t seem to get that excited by Apple any more.
I was trying to buy a computer monitor the other day. I was standing at a train platform browsing Amazon via their dedicated app. I was prevented from hitting the ‘one click’ buy button because my 3G Vodafone service kept swapping into E, then into GPRS (that annoying little round circle on the iPhone) and then into ‘NO Service’.
As a result I didn’t bother with the purchase. I hadn’t bothered to put the item into my shopping basket. Like most high-frequency Amazon Prime customers, I just order with one-click and rarely bother storing anything for purchase.
No wonder Amazon is thinking beyond the operator. See this post from VentureBeat (“Amazon reportedly tested new wireless spectrum from satellite provider Globalstar“).
When the mobile operator can’t get it’s data connectivity working properly — enough, that is, to let me simply send and receive a few tens of kilobytes and thereby completely by Amazon purchase — it’s time for the Amazon executives to start problem solving.
I’m confident I’m not alone in being unable to make transactions because I’ve got limited data connectivity. This actually ends up happening quite a lot to me as I buy quite a lot with Amazon. I wonder if the company collects any analytics to show just how many customers try and buy something — but can’t — because of poor signal?
Many of those following my Tweets the other week rubbished the connection capabilities of Globalstar. I haven’t had cause to use their primary service myself. However speed isn’t the problem. It’s basic connectivity. Generally speaking, Satellite data service is excellent if you’re in one static location, you’ve got good weather and you’re paying a decent whack for a decent data speed.
Sticking a satellite antenna into a device that’s already screwed from a battery consumption standpoint isn’t good news. That wouldn’t be a workable solution for the mass market.
That’s ok though — as it’s not what’s being discussed in the VentureBeat post (which itself is quoting Bloomberg). No. It’s TLPS — terrestrial low power service — which, if approved, would give Globalstar the ability to coat large swathes of the place in WiFi-like connectivity. (See: “Understanding the Terrestrial Low Power Service” from Globalstar).
It’s all a bit theoretical at the moment as a few regulatory hurdles need to be surmounted. Wouldn’t this be a stimulating addition to the mobile ecosystem?
I can imagine Amazon doing a massive connectivity deal in this regard to make sure that all of their customers (or, at least, Amazon device users) never want for signal when they’re trying to make transactions.
I like the thinking. I seriously like the panic it would cause the existing and rather lazy mobile operators around the world too.
And here is the other press release, substantially similar to the last one. I wanted to post both.
No commentary from me yet. I’m still digesting.
Have a read:
Nokia to sell Devices & Services business to Microsoft in EUR 5.44 billion all-cash transaction
Stock Exchange Release
September 3, 2013 at 06.00 (CET +1)
Transaction expected to be significantly accretive to Nokia earnings.
Nokia continues to develop, and sees significant value in, advanced technologies, its patent portfolio and Nokia brand.
Nokia focusing on NSN, HERE and Advanced Technologies post-transaction. Each business a leading player in its respective segment.
Nokia outlines changes to leadership and Board of Directors.
ESPOO, Finland – Nokia Corporation today announced that it has signed an agreement to enter into a transaction whereby Nokia will sell substantially all of its Devices & Services business and licence its patents to Microsoft for EUR 5.44 billion in cash, payable at closing. Nokia expects to book a gain on sale of approximately EUR 3.2 billion, and expects the transaction to be significantly accretive to earnings.
The transaction is expected to close in the first quarter of 2014, subject to approval by Nokia shareholders, regulatory approvals and other customary closing conditions.
Following the transaction, Nokia plans to focus on its three established businesses, each of which is a leader in enabling mobility in its respective market segment: NSN, a leader in network infrastructure and services; HERE, a leader in mapping and location services; and Advanced Technologies, a leader in technology development and licensing. At closing, this transaction is expected to strengthen Nokia’s financial position and provide a solid basis for future investment in these three businesses.
“After a thorough assessment of how to maximize shareholder value, including consideration of a variety of alternatives, we believe this transaction is the best path forward for Nokia and its shareholders,” said Risto Siilasmaa, Chairman of the Nokia Board of Directors and, following today’s announcement, also Nokia interim CEO.
Subject to the closing of the transaction, Microsoft will acquire substantially all of Nokia’s Devices & Services business, including the Mobile Phones and Smart Devices business units as well as an industry-leading design team, operations including all Nokia Devices & Services production facilities, Devices & Services-related sales and marketing activities, and related support functions. At closing, approximately 32,000 people are expected to transfer to Microsoft, including approximately 4,700 people in Finland. Nokia’s CTO (Chief Technology Office) organization and patent portfolio will remain within the Nokia Group. The operations that are planned to be transferred to Microsoft generated an estimated EUR 14.9 billion, or almost 50%, of Nokia’s net sales for the full year 2012.
As part of the transaction, Nokia will grant Microsoft a 10 year non-exclusive license to its patents as of the time of the closing, and Microsoft will grant Nokia reciprocal rights related to HERE services. In addition, Nokia will grant Microsoft an option to extend this mutual patent agreement to perpetuity. Of the total purchase price of EUR 5.44 billion, EUR 3.79 billion relates to the purchase of substantially all of the Devices & Services business, and EUR 1.65 billion relates to the mutual patent agreement and future option.
Additionally, Microsoft will become a strategic licensee of the HERE platform, and will separately pay Nokia for a four year license. This revenue stream is expected to substantially replace the revenue stream HERE is currently receiving from Nokia’s Devices & Services business internally. If the transaction closes Microsoft is expected to become one of the top three customers of HERE.
Microsoft has agreed to make immediately available to Nokia EUR 1.5 billion of financing in the form of three EUR 500 million tranches of convertible bonds to be issued by Nokia maturing in 5, 6 and 7 years respectively. It is at Nokia’s discretion if it chooses to draw down all or some of these tranches. The financing is not conditional on the transaction closing. If the transaction closes, any outstanding bonds will be redeemed and netted against the deal proceeds by the amount of principal and accrued interest.
The following are the key terms of the three tranches of bonds Nokia may choose to issue:
The first tranche matures in 5 years and has a 1.125% per annum coupon payable semi-annually with an initial conversion price of EUR 3.9338.
The second tranche matures in 6 years and has a 2.5% per annum coupon payable semi-annually with an initial conversion price of EUR 4.0851.
The third tranche matures in 7 years and has a 3.625% per annum coupon payable semi-annually with an initial conversion price of EUR 4.2364.
The Board of Directors of Nokia will separately assess whether to draw down some or all of this financing. If Nokia would decide to utilize this financing option, the earliest that Microsoft could convert any of these bonds to shares is two years from draw down.
Microsoft has agreed to a 10 year license arrangement with Nokia to use the Nokia brand on current Mobile Phones products. Nokia will continue to own and maintain the Nokia brand. Under the terms of the transaction, Microsoft has agreed to a 10 year license arrangement with Nokia to use the Nokia brand on current and subsequently developed products based on the Series 30 and Series 40 operating systems. Upon the closing of the transaction, Nokia would be restricted from licensing the Nokia brand for use in connection with mobile device sales for 30 months and from using the Nokia brand on Nokia’s own mobile devices until December 31, 2015.
The transaction is subject to potential purchase price adjustments, protecting both Nokia and Microsoft, and a USD 750 million termination fee payable by Microsoft to Nokia in the event that the transaction fails to receive necessary regulatory clearances.
Building Nokia’s next chapter
Following the transaction, Nokia plans to focus on its three established businesses, each of which is a leader in enabling mobility in its respective market segment: NSN, a leader in network infrastructure and services; HERE, a leader in mapping and location services; and Advanced Technologies, a leader in technology development and licensing.
Nokia will retain its headquarters in Finland. Excluding the approximately 32,000 people planned to transfer to Microsoft, Nokia would have employed approximately 56,000 people at the end of the second quarter 2013.
“Today is an important moment of change and reinvention for Nokia and its employees,” said Nokia Chairman and interim CEO Mr. Siilasmaa. “With our strong corporate identity, leading assets and talent, and from a position of renewed financial strength, we will build Nokia’s next chapter.”
NSN, a wholly-owned business of Nokia since August 2013, is a leader in mobile broadband, and is focused on operating at the forefront of each generation of mobile technology, including pushing the boundaries of connecting people through LTE and future technologies. Nokia continues to manage NSN as a strong, independent entity.
HERE will continue to focus on growing its industry-leading position through a broad location offering across mobile devices, connected devices, enterprise solutions and the automotive environment. HERE will continue to execute its strategy to become the leading independent location cloud platform company, offering mapping and location services across different screens and operating systems.
Our Advanced Technologies business will build on several of Nokia’s current CTO and Intellectual Property Rights activities.Advanced Technologies will explore new business opportunities through advanced research, development and concept products in areas such as connectivity, sensing and material technologies, as well as web and cloud technologies. At the same time, Advanced Technologies plans to continue to build Nokia’s patent portfolio from this innovation and targets to expand its industry-leading technology licensing program, spanning technologies that enable mobility today and tomorrow.
“Following this transaction, Nokia’s financial situation is expected to be significantly stronger and its earnings profile significantly improved,” said Nokia CFO and interim President Timo Ihamuotila. “We will have three well-positioned businesses, each a leader in its market. Overall, we will continue to focus on managing and maximizing the assets of Nokia Group prudently and pragmatically to create value for Nokia shareholders.”
Historical pro forma information and strategic evaluation
This transaction is expected to be significantly accretive to Nokia earnings. In the first half 2013, Nokia Group net sales were EUR 11.5 billion and non-IFRS operating margin was 4.2%. On a pro forma basis assuming this transaction would have closed, Nokia Group net sales would have been EUR 6.3 billion and non-IFRS operating margin would have been 12.1% in the first half 2013.
No joking, no April Fools, the press release just came through. And here it is:
Microsoft to acquire Nokia’s Devices & Services business, license Nokia’s patents and mapping services
Stock Exchange Release
September 3, 2013 at 06.00 (CET +1)
REDMOND, Washington and ESPOO, Finland – Microsoft Corporation and Nokia Corporation today announced that the Boards of Directors for both companies have decided to enter into a transaction whereby Microsoft will purchase substantially all of Nokia’s Devices & Services business, license Nokia’s patents, and license and use Nokia’s mapping services.
Under the terms of the agreement, Microsoft will pay EUR 3.79 billion to purchase substantially all of Nokia’s Devices & Services business, and EUR 1.65 billion to license Nokia’s patents, for a total transaction price of EUR 5.44 billion in cash. Microsoft will draw upon its overseas cash resources to fund the transaction. The transaction is expected to close in the first quarter of 2014, subject to approval by Nokia’s shareholders, regulatory approvals and other closing conditions.
Building on the partnership with Nokia announced in February 2011 and the increasing success of Nokia’s Lumia smartphones, Microsoft aims to accelerate the growth of its share and profit in mobile devices through faster innovation, increased synergies, and unified branding and marketing. For Nokia, this transaction is expected to be significantly accretive to earnings, strengthen its financial position, and provide a solid basis for future investment in its continuing businesses.
“It’s a bold step into the future – a win-win for employees, shareholders and consumers of both companies. Bringing these great teams together will accelerate Microsoft’s share and profits in phones, and strengthen the overall opportunities for both Microsoft and our partners across our entire family of devices and services,” said Steve Ballmer, Microsoft chief executive officer. “In addition to their innovation and strength in phones at all price points, Nokia brings proven capability and talent in critical areas such as hardware design and engineering, supply chain and manufacturing management, and hardware sales, marketing and distribution.”
“We are excited and honored to be bringing Nokia’s incredible people, technologies and assets into our Microsoft family. Given our long partnership with Nokia and the many key Nokia leaders that are joining Microsoft, we anticipate a smooth transition and great execution,” Ballmer said. “With ongoing share growth and the synergies across marketing, branding and advertising, we expect this acquisition to be accretive to our adjusted earnings per share starting in FY15, and we see significant long-term revenue and profit opportunities for our shareholders.”
“For Nokia, this is an important moment of reinvention and from a position of financial strength, we can build our next chapter,” said Risto Siilasmaa, Chairman of the Nokia Board of Directors and, following today’s announcement, Nokia Interim CEO. “After a thorough assessment of how to maximize shareholder value, including consideration of a variety of alternatives, we believe this transaction is the best path forward for Nokia and its shareholders. Additionally, the deal offers future opportunities for many Nokia employees as part of a company with the strategy, financial resources and determination to succeed in the mobile space.”
“Building on our successful partnership, we can now bring together the best of Microsoft’s software engineering with the best of Nokia’s product engineering, award-winning design, and global sales, marketing and manufacturing,” said Stephen Elop, who following today’s announcement is stepping aside as Nokia President and CEO to become Nokia Executive Vice President of Devices & Services. “With this combination of talented people, we have the opportunity to accelerate the current momentum and cutting-edge innovation of both our smart devices and mobile phone products.”
Nokia has outlined its expected focus upon the closing of the transaction in a separate press release published today.
TERMS OF THE AGREEMENT
Under the terms of the agreement, Microsoft will acquire substantially all of Nokia’s Devices and Services business, including the Mobile Phones and Smart Devices business units as well as an industry-leading design team, operations including all Nokia Devices & Services-related production facilities, Devices & Services-related sales and marketing activities, and related support functions. At closing, approximately 32,000 people are expected to transfer to Microsoft, including 4,700 people in Finland and 18,300 employees directly involved in manufacturing, assembly and packaging of products worldwide. The operations that are planned to be transferred to Microsoft generated an estimated EUR 14.9 billion, or almost 50 percent of Nokia’s net sales for the full year 2012.
Microsoft is acquiring Nokia’s Smart Devices business unit, including the Lumia brand and products. Lumia handsets have won numerous awards and have grown in sales in each of the last three quarters, with sales reaching 7.4 million units in the second quarter of 2013.
As part of the transaction, Nokia is assigning to Microsoft its long-term patent licensing agreement with Qualcomm, as well as other licensing agreements.
Microsoft is also acquiring Nokia’s Mobile Phones business unit, which serves hundreds of millions of customers worldwide, and had sales of 53.7 million units in the second quarter of 2013. Microsoft will acquire the Asha brand and will license the Nokia brand for use with current Nokia mobile phone products. Nokia will continue to own and manage the Nokia brand. This element provides Microsoft with the opportunity to extend its service offerings to a far wider group around the world while allowing Nokia’s mobile phones to serve as an on-ramp to Windows Phone.
Nokia will retain its patent portfolio and will grant Microsoft a 10-year non-exclusive license to its patents at the time of the closing. Microsoft will grant Nokia reciprocal rights to use Microsoft patents in its HERE services. In addition, Nokia will grant Microsoft an option to extend this mutual patent agreement in perpetuity.
In addition, Microsoft will become a strategic licensee of the HERE platform, and will separately pay Nokia for a four-year license.
Microsoft will also immediately make available to Nokia EUR 1.5 billion of financing in the form of three EUR 500 million tranches of convertible notes that Microsoft would fund from overseas resources. If Nokia decides to draw down on this financing option, Nokia would pay back these notes to Microsoft from the proceeds of the deal upon closing. The financing is not conditional on the transaction closing.
Microsoft also announced that it has selected Finland as the home for a new data center that will serve Microsoft consumers in Europe. The company said it would invest more than a quarter-billion dollars in capital and operation of the new data center over the next few years, with the potential for further expansion over time.
NOKIA LEADERSHIP CHANGES
Nokia expects that Stephen Elop, Jo Harlow, Juha Putkiranta, Timo Toikkanen, and Chris Weber would transfer to Microsoft at the anticipated closing of the transaction. Nokia has outlined these changes in more detail in a separate release issued today.
EXTRAORDINARY SHAREHOLDERS MEETING
Nokia plans to hold an Extraordinary General Meeting on November 19, 2013. The notice of the meeting and more information on the transaction and its background are planned to be published later this month.
Nokia will host a press conference today, Tuesday, Sept. 3, at 11 a.m. EEST in Dipoli, Espoo (Otakaari 24). Registration will start at 10 a.m., and the doors will open at 10.40 a.m. Due to space constraints, only media who show valid press credentials at the registration will be admitted. Media are encouraged to watch a live webcast of the press conference via: http://press.nokia.com/