Hasn't Microsoft come a little late to the mobile party?

Microsoft/Nokia deal

News this morning that Microsoft have bought Nokia’s mobile phone unit for £4.6bn is a natural step for the two companies, who have already been working together very closely on smartphones since originally signing a strategic partnership in February 2011. But the question of whether two companies which have both have been accused of falling behind in the smartphone race and resting on their laurels can really regain lost ground, is one that seems too little too late.

The deal, which will see Microsoft license Nokia’s brand to use on its products for a 10-year period, was hailed by Microsoft chief executive, Steve Ballmer, as: "…a bold step into the future — a win-win for employees, shareholders and consumers of both companies… We are excited and honored to be bringing Nokia’s incredible people, technologies and assets into our Microsoft family."

Nokia’s shares rose an incredible 45 per cent on the news and on first glance, it seems like Microsoft have made a canny move in purchasing the second-largest mobile phone maker in the world, who managed to ship 60.9 million units in the second quarter of 2013. However, the truth is that the lion’s share of these sales were feature phones, less powerful than their smartphone brethren, and a shrinking market sector, which actually resulted in Nokia’s sales dropping by 27 per cent from the same quarter in 2012.

But where Microsoft is really hoping to make some waves is with Nokia’s Lumia range of smartphones, which run Microsoft’s Windows Phone 8 operating system and have seen robust growth of 78 per cent year-on-year. In their announcement to the media, Microsoft made a big splash of the fact that the Lumia range was outselling Blackberry smartphones in 34 markets. This seems like a great achievement, but hides the fact that shipments are a country mile behind the likes of Apple’s iPhone and Samsung’s devices running Google’s Android operating system, of which more than 100m were sold in Q2 this year.

With such well developed competitors, it’s going to be a long hard road to fight their way back to the top, especially given the nature of the smartphone market today. It is not just the hardware and the operating system that informs a consumer’s decision on which phone to purchase, it is also the range of apps on offer. Apple and Google’s Android launched their app stores as far back as 2008 and have stolen a march on the Microsoft alternative. By July 2013, both Apple and Google celebrated app downloads in excess of 50 billion.

Microsoft’s Windows Phone Store, on the other hand, has yet to reach such dizzying heights, and this was one of the biggest criticisms of Nokia’s decision to embrace Microsoft’s operating system for its Lumia range. The first product to be launched in November 2011, the Lumia 800, was lauded as a compelling alternative to the duopoly of Apple iOS and Android powered phones, but many critics voiced concerns over the relatively limited range of apps available for the Windows platform. Although the situation has been constantly improving since then, it still lags a long way behind.

To make matters worse, Microsoft has something of an uneven track record as a hardware manufacturer. Traditionally a software developer, it has only had limited exposure in the hardware sector, most recently with the launch of its Surface tablet last year, which has failed to live up to expectations. The company was recently forced to slash the price of the tablet, after writing down $900m because of unsold stock of the Surface RT, more than the $853m it had earned for sales of the device.

Hopefully some of Nokia’s expertise in this area will rub off on the software giant, otherwise things could go from bad to worse in the mobile phone sector for both companies.

Photograph: Getty Images

Mark Brierley is a group editor at Global Trade Media

Photo: Getty
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Labour's purge: how it works, and what it means

The total number of people removed will be small - but the rancour will linger. 

Labour has just kicked off its first big wave of expulsions, purging many voters from the party’s leadership rolls. Twitter is ablaze with activists who believe they have been kicked out because they are supporters of Jeremy Corbyn. There are, I'm told, more expulsions to come - what's going on?  Is Labour purging its rolls of Corbyn supporters?

The short answer is “No”.

If that opener feels familiar, it should: I wrote it last year, when the last set of purges kicked off, and may end up using it again next year. Labour has stringent rules about expressing support for other candidates and membership of other parties, which account for the bulk of the expulsions. It also has a code of conduct on abusive language which is also thinning the rolls, with supporters of both candidates being kicked off. 

Although the party is in significantly better financial shape than last year, it still is running a skeleton staff and is recovering from an expensive contest (in this case, to keep Britain in the European Union). The compliance unit itself remains small, so once again people from across the party staff have been dragooned in.

The process this year is pretty much the same: Labour party headquarters doesn’t have any bespoke software to match its voters against a long list of candidates in local elections, compiled last year and added to the list of candidates that stood against Labour in the 2016 local and devolved elections, plus a large backlog of complaints from activists.

It’s that backlog that is behind many of the highest-profile and most controversial examples. Last year, in one complaint that was not upheld, a local member was reported to the Compliance Unit for their failure to attend their local party’s annual barbecue. The mood in Labour, in the country and at Westminster, is significantly more bitter this summer than last and the complaints more personal. Ronnie Draper, the general secretary of the Bfawu, the bakers’ union, one of Corbyn’s biggest supporters in the trade union movement, has been expelled, reported for tweets which included the use of the word “traitors” to refer to Labour opponents of Corbyn.  Jon Will Chambers, former bag carrier to Stella Creasy, and a vocal Corbyn critic on Twitter, has been kicked out for using a “Theresa May” twibbon to indicate his preference for May over Andrea Leadsom, in contravention of the party’s rules.

Both activities breach the letter of the party’s rules although you can (and people will) make good arguments against empowering other people to comb through the social media profiles of their opponents for reasons to dob them in.  (In both cases, I wouldn’t be shocked if both complaints were struck down on appeal)

I would be frankly astonished if Corbyn’s margin of victory – or defeat, as unlikely as that remains in my view – isn’t significantly bigger than the number of people who are barred from voting, which will include supporters of both candidates, as well as a number of duplicates (some people who paid £25 were in fact members before the freeze date, others are affliated trade unionists, and so on). 

What is unarguably more significant, as one party staffer reflected is, “the complaints are nastier now [than last year]”. More and more of the messages to compliance are firmly in what you might call “the barbecue category” – they are obviously groundless and based on personal animosity. That doesn’t feel like the basis of a party that is ready to unite at any level. Publicly and privately, most people are still talking down the chances of a split. It may prove impossible to avoid.

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.