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Nokia to sell handset business to Microsoft for $7.2 billion

Two years after hitching its fate to Microsoft's Windows Phone software, Nokia collapsed into the arms of the U.S. software giant on Tuesday, agreeing to sell its main handset business for 5.44 billion euros ($7.2 billion).

Nokia, which will continue to make networking equipment and hold patents, was once the world's dominant handset maker but was long since overtaken by Apple and Samsung in the highly competitive market for more powerful smartphones.

Nokia's Canadian boss Stephen Elop, who ran Microsoft's business software division before jumping to Nokia in 2010, will return to the U.S. firm as head of its mobile devices business - a Trojan horse, according to disgruntled Finnish media.

He is being discussed as a possible replacement for Microsoft's retiring CEO Steve Ballmer, who is trying to remake the U.S. firm into a gadget and services company like Apple before he departs, though it has fallen short so far in its attempts to compete in mobile devices.

"It's very clear to me that rationally this is the right step going forward," Elop told reporters, though he added he also felt "a great deal of sadness" over the outcome.

In three years under Elop, Nokia saw its market share collapse and its share price shrivel.

In 2011, after writing a memo that said Nokia was falling behind and lacked the in-house technology to catch up, Elop made the controversial decision to use his former firm Microsoft's Windows Phone for smartphones, rather than Nokia's own software or Google's ubiquitous Android operating system.

Nokia, which had a 40 percent share of the handset market in 2007, now has a mere 15 percent share, with an even smaller 3 percent in smartphones.

Shares in Nokia surged 39 percent to 4.10 euros on Tuesday as investors who had borrowed and sold the stock to bet on further price falls rushed to buy back to limit their losses. They are still only a fraction of their 2000 peak of 65 euros.

After today's gains the whole company is worth about 15 billion euros, a far cry from its glory days, when it peaked at over 200 billion euros.

Microsoft shares in Frankfurt were down about 2.2 percent.

(More at link)

by Anonymousreply 1609/15/2013

There are rumors of Stephen Elop becoming the new CEO, replacing Balmer. I find that rather difficult to believe though.

But Nokia has done some amazing work, in both hardware and software, lately.

And Windows Phone/Nokia is surging across the world, according to usage statistics (it's now the number 2 platform in Mexico, behind Android).

by Anonymousreply 109/03/2013

The funniest part of this is that Microsoft says they can do better than "Nokia Lumia 1020 Windows Phone" as a naming scheme.

This from the company that came up with "Windows 7 Enterprise Edition". Riiiight.

The only good branding MS has ever done are "Metro" and "Skydrive" ... both names they had to abandon due to preexisting worldwide copyright/trademark issues.


I actually love my Lumia 920, and would never go back to Apple after having used it... but a "Microsoft Lumia" doesn't have the same cache, so the fact that they can't continue using the "Nokia" brand seems like a real swing and a miss to me.

by Anonymousreply 209/04/2013

The problem with the Windows/Nokia partnership hasn't been the phones. The phones are great. Fast, durable, incredible battery life, great audio quality. Problem is that there are no apps available for the phones. I've read more than 50% of people who buy Windows Phones return them because they go home and try to download their favorite apps only to find they aren't avail.

Heard from a good source that Microsoft was paying app developers to develop for the phone but clearly that plan failed. Want GRINDR? Sorry. Need to deposit a check with your phone? Not with a Nokia! Feel like distracting yourself from the frustration of your lack of apps with a game of CANDY CRUSH? Surprise, you can't get that either.

by Anonymousreply 309/04/2013

The Xbox One is bombing before it even started. The gaming community is pissed. MS will need to release an Xbox Two if they don't want to be left behind. Call of Duty isn't going to be enough to hold onto the gamers when they decide to upgrade.

by Anonymousreply 509/04/2013

The big mistake was Microsoft's Stephen Elop not allowing Nokia to make Android phones too.

R4, I fear, as a Lumia owner, that now that Microsoft has bought the largest Windows handset maker and will so dominate the sector that the smaller manufacturers won't see any point in making Windows phones anymore. Only Microsoft/Nokia will be making Windows handsets then and so the Windows phone will died.

And, yes, apps are a serious problem. When the airline I fly with doesn't have a Windows app but it does have an Android and iOS app, it's a problem. When 75% of the companies whose products I buy or use don't have a Windows app, but they do have Android and iOS apps, it's a problem.

Stephen Elop is a real jerk.

by Anonymousreply 609/04/2013

Soon Finnish tops will be flooding Redmond to satisfy the insatiable bottoms who congregate there. Will it lead to better products? Possibly, but in any event Unsatisfied Bottoms are so thick there the possibility of labor militancy and sit down strikes were a real possibility.

by Anonymousreply 1009/05/2013

I'm pretty sure Finnish tops are HUNG.

by Anonymousreply 1109/05/2013

R9, if you're still around. Why would I be projecting onto Stephen Elop? That's a bizarre understanding of the concept of projecting. Besides, he *is* a real jerk, and fucked up Nokia. In fact, there is no Nokia now, at least not as a handset maker. The Nokia company will continue to exist in Finland as a producer of telecommunications networks. Nokia the handset maker, about to be owned by Microsoft, will in a few years time probably abandon the name Nokia and adopt that of Microsoft. So, yeah, I think there's something amiss with Stephen Elop's management of Nokia.

To respond to your comments. Nokia currently makes 80% of Windows phones sold. The companies that make the other 20% also make Android phones. If the company producing the Windows platform is also making 80% of Windows phones then the other companies will feel that they have very little influence in development of the Windows platform. Especially since the overall Windows market share is so small, it may end up being not in the interest of these other companies to continue making Windows phones. Besides, if you don't like monocultures you shouldn't want the largest handset maker and the platform developer to be one and the same.

Apple is quite successful with its mobile phones primarily because it's the one that invented smartphones, or at least was the first to bring them to market, and it also has an extremely strong brand value. Microsoft's brand value beyond its computer OS is not that great. Moreover, Apple products sell at too high a price, but Apple can deal with that, its "premium" value as exemplifed by the price is part of the attraction. Microsoft, as owner of Nokia phones, however, will not be able to play that game and, especially given the low market share will have to try and make its phones as accessible as possible. But, in markets such as Asia, where Nokia was still doing fairly well with its cheap non-Windows phone range (the Asha models) it is starting to be outperformed by cheap Android phones made by Chinese companies. So, Nokia/Windows is going to have to work really hard to keep its market share in developing countries while also selling its products cheaply.

As for apps, actually, it's a hugely significant factor. Daily, I see a company or a product or a service or a website whose app I cannot download because they only make them available for Apple and Android. And, even with the apps they do have, many of them aren't the full version. When a company is struggling so much with market share and the availability or otherwise of apps is the kind of thing that is going to influence a buyer's opinion, this is a crucial issue.

As for diversity, I've been using Mac computers for 20 years, I stuck with them in the dark days of the 1990s, when I had to take 1 1/2 hour journeys to distant parts of town that people rarely ventured to in order to get service. I did this partly because they were such a good product and also because I didn't like the then dauntingly huge Microsoft monopoly. Now, that was a true monoculture.

But, when it came to buying a phone in 2013 I actually wanted a Nokia with Windows, to an extent precisely because I didn't like the monoculture of Apple and Android. Also, I really like (or liked) Nokia and wanted a Nokia phone again. And, I'm not so fussy that the lack of apps is something I thought I'd be able to overlook, especially with the idea that over time more would become available, although it's not turning out like that.

On Elop - here was a former Microsoft executive who went to Nokia, insisted Nokia could use only the Windows platform, then he negotiates the sale of Nokia to Microsoft and returns to Microsoft as a Vice President and perhaps even the next CEO. And you don't see that there's something a tad wrong with this picture?

Are you a Microsoft employee, by the way?

by Anonymousreply 1209/14/2013

[bold]Nokia Windows Phones win PCMag’s End-user Business Choice Award 2013[/bold]

Windows Phones have always scored well when it comes to customer satisfaction, and a new survey published by PCMag finds this satisfaction also carries over into the work place, with business users who use Windows Phones as their primary work phone being much more satisfied with them than Galaxy, iPhone or Blackberry users.

PCMag notes:

[quote]Nokia had the highest ratings in every end-user satisfaction measure in which it had sufficient responses in our survey. It’s the clear winner of the end-user Business Choice Award for smartphones. The company received average ratings of 9.0 or higher for satisfaction with several business-related tasks including email, messaging, calendars and scheduling, and voice communications, which undoubtedly contributed to its 9.0 rating for likelihood to recommend.


Windows Phone had a net promoter score of 65%, while poor Blackberry had a score of –23%, which may explain why Windows Phones appear to be on a tear to replace Blackberrys in enterprise.

by Anonymousreply 1309/14/2013

Yes, r13, Nokia - Nokia is a well-loved company with people very loyal to it, such as myself.

What we're concerned about, however, is Nokia no longer being Nokia, but becoming Microsoft. We'll see how that turns out but, I can tell you for a fact, if my Nokia Lumia had not been made by the Finnish company Nokia but had been made by Microsoft, I would not have bought it. And, I am sure there are millions of others who feel the same.

By the way, that survey was done by PCMag, and anyone could just send their opinions in, it wasn't a randomly selected cross-section of business users. And, participants were put into a draw for a WIndows-based Lenovo IdeaPad Z400 Touch.

Also, the survey results are categorised according to handset manufacturer, not according to operating system. If you categorise it according to whether it's Android, Windows, Blackberry, Apple, then Android wins by a huge margin. Imagine by what huge margins Nokia would have been winning on every count if Elop had also let them offer Android models as well.

And, you forgot this bit (probably because you didn't actually read the survey): "From an administrator's perspective Nokia's difficulty gaining traction showed in the administrator portion of the survey; too few respondents indicated Nokia was the primary brand of smartphone they deployed, so we could not include the company in this portion of our analysis."

by Anonymousreply 1409/15/2013

The world needs another Android phone like it needs another politician. If Nokia had made android phones, it'd be an also-ran, hardly worth talking about. WP8 makes it distinctive, and gives WP8 the chance it deserves.

You're a real Debbie downer, you know that? It's like you're grasping at reasons to put it down and be dismissive.

Are you employed by Google?

by Anonymousreply 1509/15/2013

A thread like this proves VOTN didn't leave, he just stopped signing his name.

by Anonymousreply 1609/15/2013
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