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Nokia: It's Really Happening

Ray Le Maistre
11/19/2013
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Even though it was never going to be kicked out by the shareholders, there is something quite shocking about what has happened today in Espoo, Finland.

At an Extraordinary General Meeting, the shareholders of Nokia Corp. (NYSE: NOK) approved the sale of "substantially all of Nokia's Devices & Services business" to Microsoft Corp. (Nasdaq: MSFT). More than 99 percent of the votes cast at the meeting were in favor of the 5.44 billion ($7.36 billion) deal. (See: Nokia Sells Devices Business to Microsoft .)

Unless there are any regulatory issues, by the end of March, Nokia will no longer be making mobile phones. It will primarily be a mobile network infrastructure and managed services provider. Nokia Solutions and Networks (NSN) will generate the majority of the company's revenue. The other parts of the business will be HERE (which deals in location-based services) and Advanced Technologies (which looks to use Nokia's patent portfolio).

We have already covered the ins and outs of this deal, and we'll have to wait and see what Microsoft actually does with the device business. (See: The Nokia/Microsoft Conspiracy Theory.)

Still, something just does not seem right. It just doesn't seem right at all.

Ray Le Maistre, Editor-in-Chief, Light Reading

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DanJones
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DanJones,
User Rank: Blogger
11/21/2013 | 12:44:29 PM
Nokia>>>X-Box
If I was Microsoft I would be thinking of ways to build an ecosystem round the X-Box. There must be ways to link tablets and smartphones more closely to the X-Box. That would make the most sense to me.
pzernik
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pzernik,
User Rank: Light Sabre
11/20/2013 | 2:40:54 PM
Re: The shock factor
Don't forget that MS is getting the manufacturing, distribution, design, operations, sales and marketing teams from Nokia as part of the deal.  They obviously see value in the efficiencies gained from these teams, especially the manufacturing and distribution into markets with higher upside than the US market.
Kruz
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Kruz,
User Rank: Light Sabre
11/20/2013 | 11:39:18 AM
Re: The shock factor
How do you see its future? Was it just acquired for its patents? I see no value in having a Microsoft branded phone while Nokia will always be a brand people can related to and is synonym to heavy duty hardware.

Once thing worth mentioning is that for the first time, the Lumia division, which accounts for the biggest share in windows phone worldwide is actually doing well( figures are low still but on the rise, YOY). And Windows have been famous for doing it right the 3rd time, look at the Xbox for instance.
RitchBlasi
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RitchBlasi,
User Rank: Light Sabre
11/20/2013 | 9:56:48 AM
Re: Shareholders
Just got up and checked e-mail - LOL.  Great start to the morning.
Ray@LR
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Ray@LR,
User Rank: Blogger
11/20/2013 | 8:13:48 AM
The shock factor
On a financial level, you could say this is the best deal that Nokia shareholders would have got, given the circumstances, so it can be viewed as "a good deal" that makes Nokia shareholders "happy".

BUt, from my personal perspective, there's something not quite right. Whereas RIM/BlackBerry just looks like a classic lesson in poor management, the Nokia situation feels different. There is no doubt that the company failed to react quickly enough to the smartphone boom, but the decisoins made since then... well...

It'll make for an interesting case study.

As will what happens next, no doubt - and I mean, what happens next with Nokia's handset division at MSFT and what happens next for what is left of Nokia. Now the onus is on NSN to bring home the bacon.
Kruz
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Kruz,
User Rank: Light Sabre
11/20/2013 | 5:21:54 AM
Re: Shareholders
Nokia could have chosen another alternative few years ago, but today this is the best they can get out with. It is true Elop guided the company into that direction by tying it to Microsoft with no other choice; it could have easily adopted Microsoft along with Android, but then again, it could have been where HTC is now. Shareholders are happy and it's been a while where they only had to deal with negative news.
MarkC73
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MarkC73,
User Rank: Light Sabre
11/20/2013 | 2:36:12 AM
Re: Shareholders
@Ritch

 

I think the saying goes...

  "... if you can't beat em ...

             get paid ..."
MarkC73
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MarkC73,
User Rank: Light Sabre
11/20/2013 | 2:33:52 AM
Re: Quitting while they're ahead
I agree, and I'm not a fan of MS either, but what choice do the Nokia shareholders really have.  I think the stragegy to put everything into one last try was a good strategy but maybe it was the wrong plan but either way it didn't pan out.  But whether it was intentional or not, seeing how the deal went down, its hard not to cry foul.  Setup for sale or using connections to forge a softer fall?  I doubt we'll ever really know.  My guess, a bit of both, hedging both and Mr Elop keeps on getting paid (and well).
R Clark
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R Clark,
User Rank: Blogger
11/19/2013 | 9:11:38 PM
Quitting while they're ahead
I commend Nokia for getting out with something for their shareholders.  After ignoring  the iPhone, missing the Android opportunity and nailing their fate to Windows they didn't have much choice. Better than going down the BlackBerry path to oblivion. 

The Elop deal seems pretty scandalous though, even by the generous standards of CEO compensation.



 
RitchBlasi
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RitchBlasi,
User Rank: Light Sabre
11/19/2013 | 4:56:37 PM
Shareholders
Could be shareholders were afraid of losing everything and figured MS had deep pockets and they could salvage some coin. You have a few financial analyst saying this is good for both companies...you know how it goes Dan.
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