Vodafone - Verizon & Nokia - Microsoft Deals

Two big deals

Made by

Shrawan Arya

Session Objective

To obtain understanding of Vodafone Verizon Deal

To obtain understanding of Nokia Microsoft Deal

Social Media Buzz regarding these deals.

Introduction

Under two separate deals that took place recently, Microsoft, Nokia, Verizon and Vodafone took steps that speak to the companies’ expectations for the smartphone market and the telecom industry as a whole. Microsoft’s decision to acquire Nokia's devices and services division could help it shore up its place in the smartphone ecosystem while Verizon and Vodafone parted ways to enhance their own products and services.

How two CEO’s had a big deal for

BreakfastVerizon, Vodafone chief executives

talked in gym and agreed on price at

breakfast.

You Did say “Breakfast meeting”

REMEMBER?

Project RiverThey named the project “River”, Verizon was referred to as Hudson and Vodafone as “Thames”.

Vodafone will get $58.9 billion in cash, $60.2 billion in Verizon stock and an additional $11 billion from smaller transactions.

What two CEO’s says:

• McAdam said simply that the time was right to buy.• "I think there's going to be a burst of rocket fuel in the Verizon engine as a result of this transaction,"• For Verizon, the deal will provide a massive boost to cash flows at a time when growth is slowing in the U.S. wireless market.• We think we have a balanced approach here," Colao told reporters, adding that he was "super committed" to the next chapter of the company. "We are reducing our debt level which will enable the company to be very robust and take opportunities if they arise."

The deal in cash and stock will give Verizon full access to the profits from the United States' largest mobile operator, handing it fresh firepower to invest in its mobile network and fend off challengers in a tough market that is fast becoming even more competitive.

Microsoft And Nokia: A Marriage Made In Hell?

Deal

• Microsoft agreed to buy Nokia’s handset unit and license its patents for $7.2 billion.

• The device and services unit, along with 32000 employees, including its CEO Elop will transfer to Microsoft.

What CEO says:• It’s a big transformation, but that’s what you’ve got to do

in the tech business to move forward,” said Ballmer.

Brand Nokia faces tough ride to get its mojo back

• For thousands of Indians, what Maruti is to cars and Colgate is to toothpaste, Nokia is most definitely is to mobile handsets.

• Microsoft’s purchase of Nokia fits the bill, as Microsoft has lacked a successful product in the fast growing mobile phone market.

• Microsoft’s purchase of Nokia’s mobile phone business is at desperation at a lack of internal innovations, acquisition in lieu of innovation, and a bet on a declining star.

• Windows Mobile did not take off, despite Nokia’s embrace, and Nokia’s market share declined from a peak of 41% to its current level of 3% despite Microsoft support. It’s unclear what Microsoft’s further investment in buying and licensing Nokia assets can achieve.

• To succeed, Microsoft should look internally. It has terrific talent. Moreover, with its deep pockets it can hire what it lacks. Successful digital firms have grown mainly on their internal development of novel technologies. Examples are Apple, Google, Samsung now, and Nokia and Blackberry earlier. Microsoft itself has created successful products primarily through internal development: DOS, Windows, Word, Excel, PowerPoint, Xbox

• Microsoft now suffers from what we call the incumbent’s curse: It fears cannibalizing cash cows, it focuses on the present over the future, and it is risk-averse. The solution lies within rather than without: Abandon failed legacy products, shun acquisitions, and innovate relentlessly within, even at the cost of cannibalizing one’s sacred cows.

Thank You