Beleaguered 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),” Ritsuko Ando and Bill Rigby report for Reuters.

“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,” Ando and Rigby report. “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.”

Ando and Rigby report, “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.”

“‘As a Finnish person, I cannot like this deal. It ends one chapter in this Nokia story,’ said Juha Varis, Danske Capital’s senior portfolio manager, whose fund owns Nokia shares. ‘On the other hand, it was maybe the last opportunity to sell it.’ Varis was one of many investors critical of Elop’s decision to bet Nokia’s future in smartphones on Microsoft’s Windows Phone software, which was praised by tech reviewers but hasn’t found the momentum to challenge the market leaders,” Ando and Rigby report. “‘So this is the outcome: the whole business for 5 billion euros. That’s peanuts compared to its history,’ he said.”

Read more in the full article here.

MacDailyNews Take: Steve Jobs killed Nokia long before Elop got there to pull the plug.

Stephen Flop, er… Elop would be the perfect replacement for Ballmer!

Related articles:
Beleaguered Nokia reports lower-than-expected revenue, Needham downgrades – July 18, 2013
Microsoft and Nokia can’t hide from the very, very ugly truth: Windows Phone is failing miserably – July 18, 2013
Nokia’s Stephen Elop: The worst CEO of all time – June 28, 2013

49 Comments

    1. Motorola was a terrible purchase by Google and will never show a return. Nokia at least has some skill in building handsets and has a chance to break even or make a profit.

      1. And don’t forget Nokia’s patent portfolio…

        Hm. MS sends Elop to Nokia. Nokia switches to Windows phone OS and tanks. MS buys Nokia and its patents at a bargain price. Elop comes back into the MS fold with potential CEO talk. Hm…

  1. … and Microsoft shares tank by 5%, erasing all benefit from Ballmer’s departure. So, it seems he was CEO for as long as it took.
    Speaking of took: That’s Samsungs next CEO: Kim Took

  2. The last death throes of Ballmeresque business thinking; the idea that if you have enough billions, you can just force your way into a market. Customers and innovation be damned!

    It also installs his minion Elop as the next Microsoft CEO. Because Elop turned Nokia around, yes? Err..no. Because he was steadfastly loyal to his puppet-master? That’s better.

    Another business disaster brought to you by Men in Suits™.

  3. great move to take over a storied company with a solid patent portfolio. get one of your own execs to become the CEO of nokia, switch the software to yours, have the nokia CEO try their hardest to compete while still slowing the inevitable decline…buy it for the cheap and get the executive back and reward him with the CEO position for a good job done.

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

    In other words, resume enhancements in order to apply for the position of CEO for Microsoft!

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