Mobile Industry on the Move April 26

By Lori Castle, Editor in Chief — April 27, 2014

Microsoft is more mobile ready with Nokia, plus more on Motorola and earnings for the industry last week.

Microsoft/Nokia
Microsoft Corp. announced it has completed its acquisition of the Nokia Devices and Services business.  The completion of the acquisition marks the first step in bringing these two organizations together as one team. “Today we welcome the Nokia Devices and Services business to our family. The mobile capabilities and assets they bring will advance our transformation,” said Microsoft CEO Satya Nadella. “Together with our partners, we remain focused on delivering innovation more rapidly in our mobile-first, cloud-first world.”

Reporting to Nadella is former Nokia President and CEO Stephen Elop, who will serve as executive vice president of the Microsoft Devices Group, overseeing an expanded devices business that includes Lumia smartphones and tablets, Nokia mobile phones, Xbox hardware, Surface, Perceptive Pixel (PPI) products, and accessories.

Microsoft will also absorb additional personnel with deep industry experience in more than 130 sites across 50 countries worldwide, including several factories that design, develop, manufacture, market and sell a broad portfolio of innovative smart devices, mobile phones and services. As part of the transaction, Microsoft will honor all existing Nokia customer warranties for existing devices, beginning April 25, 2014.

Windows Phones: In the fourth quarter of 2013, according to IDC, Windows Phone reinforced its position as a top three smartphone operating system and was the fastest-growing platform among the leading operating systems with 91% year-over-year gain. With a deeper understanding of hardware and software working as one, the company intends to strengthen and grow demand for Windows devices overall.

Furthermore, with the Nokia mobile phone business, Microsoft will target the affordable mobile devices market, a $50 billion annual opportunity, according to Strategy Analytics, delivering the first mobile experience to the next billion people.

Microsoft/Motorola Solutions
Microsoft Corp. also announced a patent licensing agreement with Motorola Solutions, soon to be part of Zebra Technologies. The license provides worldwide coverage under Microsoft’s patent portfolio for Motorola Solutions’ devices running the Android  platform and Chrome OS operating system.

“Microsoft and Motorola Solutions share a respect for intellectual property and a commitment to fair and reasonable patent licensing programs,” said Nick Psyhogeos, general manager, associate general counsel, IP licensing of the Innovation and Intellectual Property Group at Microsoft. “Microsoft prefers licensing to litigation, since licensing is a more effective way to share technology and accelerate the pace of innovation.”

“Our Motorola Solutions communications technology works best for everyone when it is backed with robust intellectual property and patents,” said Joe White, vice president of Enterprise Mobile Computing, Motorola Solutions. “We are pleased to have agreed upon a solution that allows our customers to purchase Android products from Motorola Solutions with confidence.”

Yankee Group Senior Analyst Boris Metodiev commented, “Such deals are now common and Microsoft has managed to sign licensing agreements with many Android smartphone and tablet manufacturers, including the likes of Samsung, ZTE, LG, HTC, Acer and Barnes & Noble. Not surprisingly, as with the other similar deals, the most interesting part of the agreement is not revealed: the royalties Motorola Solutions needs to pay Microsoft for the use of the patents. It sounds a bit weird, but to be able to use the ‘free’ Android operating system, vendors don’t pay Google, but Microsoft.”

OpenPeak
Enterprise mobile device and application management provider OpenPeak Inc. has hired former AT&T executive Christopher K. Hill as its new President, in a newly created role reporting directly to Chairman and CEO Dan Gittleman.

Hill, who previously served as Senior Vice President, Advanced Solutions, for AT&T Business, is tasked with executing OpenPeak’s strategic vision during the company’s dynamic, rapid growth phase. In addition to leading an aggressive international channel expansion strategy, Hill will oversee product and operational excellence and be responsible for identifying and capitalizing on new global business development opportunities.

“Chris’ exceptional leadership and deep expertise in the enterprise mobility space makes him an outstanding addition to our team in this vital role at such a critical time in OpenPeak’s growth,” said Gittleman. “I’m thrilled to have him on board and look forward to tapping into his strategic vision and proven ability to take OpenPeak to the next level.”

Over the past 17 years with AT&T Hill has held various executive roles instrumental in building and deploying the company’s business and enterprise mobility solutions. As Vice President of B2B Strategy and Operations at AT&T Wireless, he was responsible for enterprise mobility sales strategy and operations. He moved on to serve as Vice President for AT&T’s Government, Education and Medical Segments, and later as Vice President for Mobility Product Management, overseeing areas such as Machine-to-Machine (M2M), fixed mobile convergence (FMC), small business solutions and international managed services.

Most recently, as SVP of Advanced Solutions, Hill was responsible for the strategy and execution in development of the Advanced Solutions business unit, including M2M, mobile solutions, and unified communications for all business and government segments.

Earnings Roundup
Apple’s financial results for its fiscal 2014 second quarter ended March 29, 2014 include: quarterly revenue of $45.6 billion and quarterly net profit of $10.2 billion, or $11.62 per diluted share. These results compare to revenue of $43.6 billion and net profit of $9.5 billion, or $10.09 per diluted share, in the year-ago quarter. Gross margin was 39.3% compared to 37.5% in the year-ago quarter. International sales accounted for 66% of the quarter’s revenue.

AT&T reported its best revenue growth in more than two years. First-quarter consolidated revenues were $32.5 billion, up 3.6% or more than$1 billion versus the year-earlier period.Wireless revenues grew 7%; total revenues from business customers were $8.7 billion, down 2.7% versus the year-earlier quarter. Business service revenues declined 2%  year over year. Overall, declines in legacy products were partially offset by continued double-digit growth in strategic business services. Revenues from these services, the next-generation capabilities that lead AT&T's most advanced business solutions — including VPN, Ethernet, cloud, hosting and other advanced IP services — grew 16.% versus the year-earlier quarter. These services represent an annualized revenue stream of more than $9 billion and are more than 26% of wireline business revenues.

Microsoft announced revenue of $20.40 billion for the quarter ended March 31, 2014. Gross margin, operating income, net income, and diluted earnings per share for the quarter were $14.46 billion, $6.97 billion, $5.66 billion, and $0.68 per share, respectively. Devices and Consumer revenue grew 12% to $8.30 billion. Commercial revenue grew 7% to $12.23 billion.

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