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Much to the chagrin of Acer, Microsoft is making a run at hardware with its Surface RT and Surface Pro tablets, and those might be only the first of many more products to come. Microsoft's dancing a fine line with hardware in trying to set the bar for Windows 8 devices without completely ticking off its OEM partners, but it's also taken a big step towards an Apple-like business model. If Microsoft decides to go further, a major acquisition starts to make sense, and two names that have been thrown out there are Nokia and Nvidia.
Paul McDougall over at InformationWeek wrote a rather compelling piece on why Microsoft might look to acquire one of those companies. One of the points he makes is that there are already reports Microsoft is interested in building its own brand Windows Phone 8 device, along with smaller versions of its Surface tablet.
"Microsoft may be getting into the hardware game for keeps," McDougall argues, adding that Microsoft has grown tired of watching Apple garner so much attention over its products.
Microsoft could accelerate its move into the hardware game by acquiring a company like Nokia, which it already has an existing relationship with. It also so happens that Nokia's stock is relatively low these days, though Microsoft would still end up paying billions of dollars.
What I found more intriguing is the idea of acquiring Nvidia. McDougall points out that Microsoft still retains first and last rights of refusal to purchase Nvidia as part of an agreement the two hammered out when Nvidia was supplying Xbox components to Microsoft.
"If an individual or corporation makes an offer to purchase shares equal to or greater than 30 percent of the outstanding shares of our common stock, Microsoft may have first and last rights of refusal to purchase the stock," Nvidia stated in its 10-Q filing with the SEC earlier this year.
Of course, Microsoft could make a bid at any time, and even though Nvidia would probably cost around $15 billion, the Redmond giant has squirreled away $66.6 billion in cash, equivalents, and short-term investments, McDougall says.
Owning Nvidia might make things awkward in trying to balance Windows-based relationships with AMD, Intel, and ARM, but it wouldn't really matter if Microsoft's end game is to emulate Apple's business model. The question is, does that even make sense for Microsoft?
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Comments are closed on this article
agello24
November 09, 2012 at 11:26pm
if they do, then ill get the top of the line nvidia for around $100. bid bid bid bid!!!!
Scatter
November 10, 2012 at 12:11am
I don't see that happening. I don't see prices changing at all really.
Nixon
November 09, 2012 at 4:25pm
Always imagined the "soft" in "Microsoft" was software.
I guess it will have to be changed to Microhard if this happens. :S
HappyNacho
November 10, 2012 at 5:42pm
Are you retarded? Microsoft has been making hardware for years! Xbox, Kin, Surface, keyboards, and also, Microsoft invented the right click mouse.
aarcane
November 09, 2012 at 9:00am
I personally hope this NEVER comes to pass. I'd hate to get the microsoft code approach applied to nVidia drivers:
if(rand()==0)
throw new Exception();If anyone buys nVidia it should be Intel, however, I'd still hate to see that come to pass.
phoenixjc
November 09, 2012 at 8:38am
"the Redmond giant has squirreled away $66.6 billion..."
LOL
Tell me again how you are not evil incarnate Microsoft, or was that just a nice round number?
Badass1982
November 08, 2012 at 8:31pm
Microsoft ought to concentrate on producing decent software (windows 8 is a joke for ANY power users) before they even ATTEMPT to get into the Hardware game.
HappyNacho
November 10, 2012 at 6:02pm
I thought this bullshit had ended. Every power user adaptates perfectly. We are not big babies that if you change something we cry because we dont understand it.
Pyrophorics05
November 09, 2012 at 8:21am
Yeah, I am a power user and love Windows 8. It's fast, appears to have few bugs and is actually easier to access items after you learn to use it.
hammeredtoast
November 09, 2012 at 12:37am
I'm a professional video editor. I upgraded my home machine to 8. It was a tough first day, but I'm not a baby. I can adjust, sir.
kevaskous
November 08, 2012 at 8:48pm
I'm a power user and nothing i can't do that i wish to do, guess "everyone" no longer applies eh? Sorry to bust ya bubble :D.
MarioJP
November 09, 2012 at 1:43pm
I am a power User, Enthusiast. I use OSX Ubuntu And Windows out of all 3, and if i can choose 2. It would have to be Windows And OSX. these 2 OS's get the job done right!. With that said. Windows 8 is more snappier with a redefined desktop with the added twist of having Apps on your PC. I am currently planning on my next build and it will have Windows 8.
maxeeemum
November 08, 2012 at 7:55pm
Should Microsoft Make a Bid for Nvidia?
NO!
Please stick to software! You have enough trouble doing that right! Example: Windows 8!
maxeeemum
November 11, 2012 at 12:15am
No Kidding ..........
Like the Red Ring of Death Xbox, Zune, Slate, Kin, Spot Watch, WebTV, etc. That's why I stay away from M$ hardware!
Like I said M$ should stick to software and even then it's a 50/50 shot.
aaronj2906
November 08, 2012 at 5:01pm
"Microsoft may be getting into the hardware game for keeps"
Anyone remember the Sidewinder products? They had their force feedback joysticks and wheels? They exited that business.
They had their high-end gaming mice. They exited that business too and they actually refunded me the purchasing price when I had one quit working within the warranty period, and they could no longer replace it.
I'm calling B.S. on this one. Two previous hardware products of theirs, produced years apart. Both discontinued, one of them within the warranty period.
For Keeps = As long as it makes business sense for them to do it. Otherwise, expect them to drop it.
SPreston2001
November 08, 2012 at 11:17pm
Yeah same way they dropped the Zune and never looked back...
dgrmouse
November 08, 2012 at 3:43pm
We might as well speculate that Microsoft has compelling reasons to buy the Ben & Jerry's ice-cream brand.
TrackBallGT
November 08, 2012 at 3:12pm
Yes that is a great idea guys, lets let the corporation that was for the last 10 years while not outright screaming to kill our platform off but was more or less shoving us out of brick and mortar spaces and platform existence is now not only is putting out products geared towards it lets just let them take one of the few shining beacons of pc/desktops communities everywhere. That is a brilliant idea, yes let the guys who make EA appear Saintly take even more closed minded drunk with power control over our future. That couldn't be a horribly bad idea at all, it is not like my profession survives on that sort of stuff, not like I have invested my life heavily into it or anything.
Warrior247
November 08, 2012 at 3:59pm
And you typed this on a M$ based PC. Anyway, all hypocrisy aside, if it makes sense, it makes sense. AMD can't hold it's own anyway and isn't doing $h!t for the PC. The PC's problems have nothing with M$. The PC's role is being diminished by all of the devices that have taken it's traditional roles away from it. The ONLY reason to have a PC in the house is if you want one, it's not needed.
Diosjenin
November 08, 2012 at 2:57pm
Came here to say AMD - glad to see I'm not the first one. MS gets killer GPUs, lightweight x86 CPUs, and as of recently ARM CPUs on top of it all - which screams XBox/Surface more loudly than any other hardware maker out there. In return, AMD gets to survive (which is saying a fair bit these days). And who knows - if they handle it right, Intel might even end up with true competition in the CPU space again. Sounds like a win all around to me.
Warrior247
November 08, 2012 at 2:42pm
One more thing about AMD. I think they may have some serious debt issues as well. That may turn off a potential buyer. I actually thought Samsung was looking at them at one point.
drayzen
November 08, 2012 at 2:32pm
Let's just leave everything where it is.
We've got two major players each in CPU's and GPU's which has driven innovation and led to the creation of the APU.
Go back to having only one major player in any area, kill competition, and watch innovation disappear...
If anyone really wanted what nVidia's got I'm guessing it would be a whole lot cheaper to do some patent licensing, remember they're a fabless company so there's no physical value to their business, only intellectual.
someuid
November 08, 2012 at 2:29pm
Microsoft can easily build their own hardware without going through the expense and glacial acquisition process. All they have to do is pick a partner and support them. Hire some good designers and support them. Release some well-thought out products and support them.
Their current model of slap something together the managers designed, toss it out, wait for consumers to take it up, then abandon it when they aren't sudden trillionairs in a quarter is their roadblock, not their lack of having acquired the right companies.
strangelove9
November 08, 2012 at 1:57pm
I second an AMD takeover.
Let's face it, Team Red needs some help - despite phenomenal past accomplishments, they're not doing too well. And it would be great to have someone thumb their nose at Intel. Between Apple already rumoured to contemplate switching processors and making is own ARM chips, and Microsoft infusing cash into AMD (who are still a force in the CPU/GPU world), Intel would finally feel obligated to innovate and keep prices low. 'Cause right now they're once again getting expensive and cocky.
spacemonkiee
November 08, 2012 at 1:03pm
Charge for updates? last I checked they were free... And they support their products for 10 years which is a hell of a long time In hardware land.
Haters be hating yo.
SPreston2001
November 08, 2012 at 1:32pm
Umm yes they are free now but that was just my of expressing how micro$oft thinks. They have already discussed a future OS with a paid subscription type model...
kevaskous
November 08, 2012 at 8:53pm
they discuss a lot of things, including turning your seat into a mobile pc, doesn't mean jack all.
SPreston2001
November 08, 2012 at 11:12pm
Dude its pretty obvious which direction Micro$oft is headed. They will be trying to nickel and dime us for everything in the near future. You can take up for them all you want they will gladly take your $$$ too. Dummy...
Leo Scott
November 08, 2012 at 12:18pm
Sooner or later the FTC should do its job and stop giant conglomerations in order to prevent monopolies. I like Microsoft but I wouldn't want to see them suck up NVIDIA.
big_montana
November 08, 2012 at 1:03pm
Monopolies are not illegal, however, they cannot use their monopoly power to gain price or other advantages thanks to the Sherman Anti-Trust Act. It was called Anti-Trust because that was the form that monopolies held in 1890, when it was enacted. A group of companies formed a trust to fix prices low enough to drive competitors out of business. Once they had a monopoly on the market, these trusts would raise prices to regain their profit. A monopoly is when a business, usually a large corporation, is the only provider of a good or service. An example of this is gasoline. There are choices, such as mass transit or bicycles, but they aren't an easy substitute in many areas. Econ and Business 101 is now recessed.
SPreston2001
November 08, 2012 at 12:08pm
Hell no!! They would just run it into the ground and start charging for driver updates!! Screw Microsoft!!
Warrior247
November 08, 2012 at 12:02pm
I'm no fan of AMD, they suck. But AMD makes more sense. They're in trouble, broke, x86, and prime for sale. Plus they provided the GPU for the 360 so they're familiar with M$. Nvidia is the better company with the better technology though. But in the age of patent wars Nvidia might be better.
jlh304
November 08, 2012 at 2:18pm
"Plus they provided the GPU for the 360 "
I think Nvidia supplies the GPU for xbox 360 not AMD/ATI.
Warrior247
November 08, 2012 at 2:43pm
Nope, you are incorrect. ATI(AMD) made the GPU for the 360 and Nvidia made the GPU for the PS3. Also AMD was crowing very loudly earlier this year that they've got the contracts for ALL of the next gen consoles. The Wii U has a AMD GPU right now! If this is the case for the rest of the next gen consoles, M$ could offset some of it's own costs and make some money from the other console makers! Plus AMD makes CPUs and mobos. Something Nvidia doesn't/can't do.
jlh304
November 08, 2012 at 3:08pm
You are correct on the ati in 360. I thought from reading the article with MS having the stock piece with Nvidia they would have used Nvidia.
Neufeldt2002
November 08, 2012 at 4:34pm
MS did use nVidia for their first Xbox, but I don't remember what the fall out was. Had something to do with how nVidia was using the tech for the chipsets and MS got all pissy about it. That was in the early 2000 era, since then it's been ATI. As for the stock agreement, this was to ensure that MS could stop their IP from ending up in their competitors hands. However the landscape has shifted significantly since then. Of course I am going from memory here, and it is not always the best so I could be wrong on a few things.
Edit:
"In 2002 Microsoft and Nvidia entered arbitration over a dispute on the pricing of Nvidia's chips for the Xbox.[13] Nvidia's filing with the SEC indicated that Microsoft was seeking a US$13 million discount on shipments for NVIDIA's fiscal year 2002. Microsoft alleged violations of the agreement the two companies entered, sought reduced chipset pricing, and sought to ensure that Nvidia fulfill Microsoft's chipset orders without limits on quantity. The matter was privately settled on February 6, 2003."
Taken from: http://en.wikipedia.org/wiki/Xbox
Warrior247
November 08, 2012 at 8:42pm
Well, then THATS the reason AMD was able to scoop the 360 AND the 720! They also have the Wii U right now and the PS4. Nvidia f*kd up. You're talking tens of millions of these consoles being built. The Wii U does not have the latest AMD tech, the Wii U GPU is based on the Radeon HD 5000 series GPU, which was introduced to the PC gaming market in 2009.
TommM
November 08, 2012 at 11:58am
Oh man, PLEASE don't let MS buy nVidia. nVidia has their shit together, are innovative and progressive whereas for the last decade-plus, MS has been regressive and reactionary to other companies.
It would kill nVidia if those Kirkland knuckleheads took them over.
