“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
Before I got my first iPhone I would get Nokia mobile phones. Since I’ve started getting iPhones I could never get another Nokia.
Notify the next of Kin.
Microsoft didn’t see the future of mobile. Neither did Nokia. Sounds like a marriage made in heaven. Let them rot together in Redmond.
Why should they rot? Strong competition is good for everyone.
Yes, but Microsoft is not strong competition. It is a utility, not a manufacturer.
Yes – that is a shame. I would not want to see Nokia rot but become a good competitor.
That’s less than they paid for Skype!
Compared to Motorola, that’s a steal.
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.
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…
Microsoft does not get Nokia’s patents – they get a 10 year license to use the IP, but they do not own them.
With an option to extend the license in perpetuity (for $, I’m sure).
Patents, like milk and eggs, do have an expiration date.
… and Microsoft shares tank by 5%, erasing all benefit from Ballmer’s departure. So, it seems he was CEO for as long as it took.
Speaking of took: That’s Samsungs next CEO: Kim Took
Is that 5% due to the market conditions around Obama wanting to attack Syria or from this deal?
Actually, the market is up this morning. Stop your Obama bashing.
So that just leaves Blackberry to find a buyer.
The last death throes of Ballmeresque business thinking; the idea that if you have enough billions, you can just force your way into a market. Customers and innovation be damned!
It also installs his minion Elop as the next Microsoft CEO. Because Elop turned Nokia around, yes? Err..no. Because he was steadfastly loyal to his puppet-master? That’s better.
Another business disaster brought to you by Men in Suits™.
In five years Microsoft will be writing this OFF. 😎
Good to see someone is hard at work picking up the world’s garbage.
Such a deal!
great move to take over a storied company with a solid patent portfolio. get one of your own execs to become the CEO of nokia, switch the software to yours, have the nokia CEO try their hardest to compete while still slowing the inevitable decline…buy it for the cheap and get the executive back and reward him with the CEO position for a good job done.
Yes, Steven Elop pissed away over 50% of the value of the stock.
“In three years under Elop, Nokia saw its market share collapse and its share price shrivel.”
In other words, resume enhancements in order to apply for the position of CEO for Microsoft!
The collapse was due to conditions in place before Elop got there. There is no way to be certain that anyone could have saved Nokia.
Nokia had some slick phone OS software.
Elop threw it away, and replaced it with that Wonderful MS Metro!
This could a key acquisition and with visionary leadership they could……oh wait, it’s M$….sorry, my bad.
Nokia sealed its own fate the day they hired Elop.
Now, what phone maker would even consider licensing Windows Mobile?
All the other MS phone makers are screwed.
Plays for Sure!!!
Seriously, can someone name one business partner that Microsoft has not screwed over in one way or another? Bueller? Bueller?
Why do I get the feeling two HMS Titanic’s just crashed into one another?
Lets Play JEOPARDY!
The only CEO with less foresight (or foreskin) than Steve Ballmer?
Who is Steven Elop?
I give them two years before they’re turning out the lights on a very painful and expensive mistake.
Love it–here is more of the quote:
Apple’s retail store initiative was met with significant doubts from analysts at the time. A Businessweek article from 2001 titled “Sorry, Steve: Here’s Why Apple Stores Won’t Work” confidently predicted the doom of the stores.
Problem is, the numbers don’t add up. Given the decision to set up shop in high-rent districts in Manhattan, Boston, Chicago, and Jobs’s hometown of Palo Alto, Calif., the leases for Apple’s stores could cost $1.2 million a year each, says David A. Goldstein, president of researcher Channel Marketing Corp. Since PC retailing gross margins are normally 10% or less, Apple would have to sell $12 million a year per store to pay for the space. Gateway does about $8 million annually at each of its Country Stores. Then there’s the cost of construction, hiring experienced staff. “I give them two years before they’re turning out the lights on a very painful and expensive mistake,” says Goldstein.
I like Stephen Elop as new CEO of Microsoft! I like that strategy a lot!
One loser to another.
My last non-iPhone was a Nokia E71. People on this site like to say that Google was copying Blackberry before the iPhone came out, but that early Android hanset looks a lot more like a Nokia E71 to me. I bought that phone 2 months after the original iPhone came out. I didn’t want a contract, and it was a much better smartphone in many ways at the time (still has a better calandar, address book, blacklists, etc.). Times have changed. They should have never hitched their wagon to Microsoft’s deminishing star.
You can’t simply buy a company the size of Nokia without lengthy negotiations. That process will have started quite some time ago and only mentioned publicly once is was pretty well sorted..
When the announcement was made that Ballmer was being ‘retiring’, they also said that a replacement would be appointed within 12 months.
I think it was inconceivable that Microsoft didn’t already have a successor lined up before giving Ballmer the boot and now we can see that the successor was lined up well before that announcement and that he will be in place long before the 12 months that were talked about.
I would add that the future doesn’t look good for Microsoft once Elop is in charge.
Just imagine if Nokia had switched to Android 3 years ago….
They’d be out of business today. Android is a profit less black hole.
You make money on the hardware and give the software away for free. 😉
Do you see a pattern here? When a company has missed the innovation train, it starts diversifying by buying up failed companies in the hope of getting some extra business.
And Steve Elop really does still live in Woodinville, WA? (Just north of Bellevue and Seattle.)
http://www.geekwire.com/2013/reaction-microsofts-huge-nokia-acquisition/
True – http://virtualglobetrotting.com/map/stephen-elops-house/view/?service=1
“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!”
Jobs had no hand in the mismanagement at Nokia or Blackberry. The management style at those two companies is what destroyed their companies.
Nokia has now been purchased by MS. For Blackberry, it will be a different story because they have their own OS. If they can’t get some cash, they will be sold for patent scrap metal.
As for Elop running MS, at least Baller with his management style, he always made money for MS.
“Jobs had no hand in the mismanagement at Nokia or Blackberry. The management style at those two companies is what destroyed their companies.”
Wrong! IF SJ and the iPhone had not come along, the smart phone world would still be trudging along in a BB style with a strong phone company leash. No one expected the iPhone to do what it did. When they (other phone comanies) realized it, it was too late for everyone except for 1. the insider mole who took the phone layout to google and 2. the “made to order” copier who can turn on a dime in copying.
Mismanagement is but a drop in the bucket to SJs iPhone tsunami in an unprepared world.
I’m not going to give up my iPhone because I like it and can afford it. However, once you have made the decision to carry two devices either a smartphone/iPad or a smartphone/small laptop with cellular Internet capability, a “feature phone”/second device combination is a good choice for cost savings. You give up a significant amount of convenience but very little in terms of capability. In my view, Nokia makes some high quality feature phones. I’d hate to see MS screw this up. It is a low end cash cow.
If I suffer a “cash crunch”, I’d give up my iPhone (and get a feature phone) and keep the iPad cellular account not the other way around. Also, I can’t see buying an iPad mini that was a smartphone in an effort to combine the two. I have a 4s and about the largest phone I want to carry is a 5. (maybe 1/2″ longer but no wider).