For Dell, lessons from
Microsoft's Nokia deal
by Mary Jo Foley February
5, 2013
One of the worst-kept
secrets in Microsoft's
investment history is no
longer a "secret." Today,
Microsoft made a $2
billion loan to one of its
largest PC OEMs, Dell , as
part of Dell's move to go
private.
Microsoft does not own
part of Dell as part of this
transaction. However, the
situation reminds me of
another major Microsoft
"investment": The billions
it paid to Nokia almost
exactly two years ago to
help rescue a company
teetering on the edge of a
"burning platform."
At the time of the
February 2011 Nokia deal,
Microsoft wanted and
needed at least one of its
partners to be "all in" with
the Windows Phone
platform, to the exclusion
of competing operating
systems like Android. With
the money it is loaning
Dell, Microsoft also may
be seeking a way to keep
the third largest PC maker
from straying into the
Linux/ChromeOS/Android
camps, as my ZDNet
colleague Larry Dignan
and others have
speculated.
There's another
interesting parallel
between the Nokia and
Dell situations. When
Microsoft backed Nokia,
there was a lot of chatter
about whether that move
would result in an unfair
Nokia advantage. There
are similar worries around
what Microsoft's Dell
investment could mean
for other PC makers and
their customers.
Nokia "will contribute its
expertise on hardware
design, language support,
and help bring Windows
Phone to a larger range of
price points, market
segments and
geographies," the original
announcement trumpeted.
What about the other
Windows Phone partners
-- HTC, Samsung, even
Dell (which delivered the
Venue Pro Windows Phone
and no follow ups)?
Weren't they now second-
class citizens in the
Windows Phone
ecosystem ?
Microsoft came out of the
gate really pushing
Nokia's Lumia as the
flagship Windows Phone a
year-plus ago. But since
then, the Softies have
backed off a bit and
shared the love.
While Microsoft still gives
Nokia props and is
counting on Nokia for
turn-by-turn navigation
and Maps technologies for
all Windows Phones,
Nokia isn't the only
Windows Phone game in
town. I see more and
more Microsoft managers
sporting the HTC 8X
Windows Phone 8s, rather
than the latest Lumias.
(Microsoft identifies HTC
as a "signature" Windows
Phone partner, but all this
really means, I've heard,
is HTC agreed to use
"Windows Phone" in the
official name of its
phones, which is
something Nokia didn't
do.)
When Microsoft chose a
phone partner for its just-
announced 4 Afrika
African-development
initiative , it went with
Huawei, not Nokia, in
spite of Nokia's long
history and expertise in
selling phones in the
developing world.
Microsoft and Huawei
jointly unveiled the new
variant of the Huawei
Windows Phone 8 Ascend
W1 yesterday.
So it could be that a
Microsoft tie-up with Dell
won't necessarily be to
the detriment of
Microsoft's other OEMs.
Rather than becoming
nothing but a factory for
new Microsoft Surface PCs
and tablets -- something
that some Microsoft
watchers believed/feared
to be the primary reason
Microsoft would invest in
Dell -- maybe a Microsoft-
backed Dell just becomes
a stronger Windows OEM.
It's a tumultous time to be
a Microsoft OEM, no doubt
about it. The PC market is
in decline, revenue-wise.
Microsoft is competing
with its own OEMs with its
Surface line of products.
And now Microsoft is
providing $2 billion loan to
one of its largest OEMs,
Dell. I wonder how many
Windows OEMs will still be
in existence in a year or
two, and how many will be
backing Windows as just
one of several different
platforms to hedge their
bets.
This story originally
appeared at ZDNet under
the headline " Will
Microsoft's $2 billion role
in Dell's buyout play out
like its Nokia
partnership? "

m.cnet.com/news/for-dell-lessons-from-microsofts-nokia-deal/57567683

meaning?

l0ng n0te

Bull-crap.....