Vodafone and Microsoft heat up the dog days of Summer

POSTED BY Windsor Holden
Time was, the dog days of August were a quiet time in the mobile industry: multinational executives migrated en masse from office to beach; analysts, secure in the knowledge that nothing of import would be happening for the next few weeks, dispersed to their sun-kissed venue of choice. (It must be said that until this summer, finding any venue in the UK upon which the sun had bestowed even a favourable glance, let alone a kiss, was hard work, but there you go.) But to move on: no sooner had I become settled in a deckchair than Vodafone had announced it was selling its stake in Verizon; barely had I struggled out of the deckchair than Microsoft weighed in with the purchase of Nokia’s mobile phone division. Yes, both these moves had been flagged for some time (in the case of Vodafone’s divestment, some years), but they still came as something of a shock to the system. To take the Vodafone/Verizon move first, this is quite simply the largest corporate transaction - $130 billion – for a decade; while the bulk of the proceeds ($84 billion) will be returned to Vodafone shareholders, it also allows Vodafone to pump significant investments (close to $10 billion) into Project Spring, the fund for its 4G networks. In the case of Microsoft’s acquisition of Nokia’s mobile arm: well, the two had been getting rather pally in recent times, what with the “broad strategic partnership” announced at the Mobile World Congress in 2011, and Nokia jettisoning Symbian in favour of the Windows OS. And everyone kept looking at Nokia’s declining market share in the smartphone space, saying “Hmm. This can’t go on, you know” and speculating on who would make a move. But, when the move came – even though, given the aforementioned strategic partnership, given the fact that Windows is now sitting on a lot of Nokia phones, it was clear who was in pole position to make said move – it was still a seismic event, not just in the mobile industry, but in mobile’s history. Nokia bestrode mobile like a colossus; globally, it dominated the handset market until the past few years. But in those past few years, with the emergence of Apple, and the re-emergence of Samsung, it has struggled to compete at the sharp end, while in the mass market space, competition has never been so intense. So Microsoft pays out $7 billion, and – even though it “will license the Nokia brand for use with current Nokia mobile phone products”, it is very much the end of an era. Enough to make even a seasoned analyst go all nostalgic, if not quite dewy-eyed, with recollections of handsets past...