Linked by Thom Holwerda on Tue 3rd Sep 2013 05:39 UTC
Microsoft Ever since Stephen Elop became CEO of Nokia we knew this outcome was inevitable. It was his job to make it as easy as possible for Microsoft to acquire the vital parts of Nokia, and here we are: Microsoft is acquiring Nokia's devices unit for 3.79 billion euro, and another 1.65 billion euro for its patents. It's a bit of a complicated deal in that Microsoft buys the Asha feature phone brand and Lumia smartphone brand outright, but will only license the Nokia name for current Nokia products; the Nokia brand will remain under the control of Nokia the company. This means Nokia as a phone brand is effectively dead.

In addition, Stephen Elop will return to Microsoft. I'm sure entirely coincidentally, Ballmer announced recently that he's stepping down.

All this was as inevitable as the tides rolling in. Nokia has been going downhill and has stagnated ever since the announcement it would bank its future on Windows Phone. It went from being the largest smartphone manufacturer to an also-ran, which is made painfully clear by the fact that Microsoft paid more for Skype than it does for Nokia's devices unit.

A painful end for a once-great phone brand. This was the plan all along, and in essence, Nokia's board has executed it masterfully; the Finnish company has switched core markets several times in its long, long history (it started out as a paper company), and the unprofitable phone business was a huge liability for the company, despite claims by some that Nokia was doing just fine. Nokia's board has masterfully gotten rid of this money pit so it can focus on the parts that are profitable.

And, as always, the next Lumia will turn it all around.

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RE[3]: Comment by MOS6510
by hhas on Tue 3rd Sep 2013 12:31 UTC in reply to "RE[2]: Comment by MOS6510"
hhas
Member since:
2006-11-28

Bingo. Nokia was already in serious trouble when Elop came aboard: its Symbian platform was clapped out and ripe for mass cannibalization by the rapidly rising Android, and their own attempts to create a viable successor were a complete mess. It's almost a mirror of 90's Apple, where Elop was supposed to be Nokia's Steve Jobs, sweeping in to save the day with fresh blood and clear direction.

Alas, as Radio says, he made one fatal newbie error by stating publicly what should've been kept utterly private, and causing such an instant and catastrophic run on stockholder and customer confidence that business schools will no teach it for decades to come.

It might seem incredible to bystanders that such a huge company could be brought so low by a few poorly chosen words. But, as pointed out, Nokia was already in an extremely vulnerable position, and Elop's Osborning of its existing platform before its replacement was ready was the only nudge needed to set far larger and more destructive market forces in motion.

Simple mistake, simple outcome; nothing complicated or malicious needed to explain it.


By contrast, paranoid "Prison Planet"-level gibber like Thom's own "It was Elop's job to trash Nokia from the inside so MS could pick it up in a firesale" may play well to the anti-MS zealots, but is utter incredulous toss from any sort of real world business perspective. I may not be a great businessman, but even I can put my brain into gear and figure out why this argument is not credible:

1. A powerful, independent Nokia that successfully translated its then 50% market share to WinPhone in the first two years of Elop's tenure would have been infinitely more valuable to MS than what they're getting now: a handful of patents and a struggling 5% market share.

2. Imagine the legal and financial shitstorm that'd land on both MS and Nokia if there was even the slightest indication that Elop was intentionally sabotaging Nokia on MS's behalf. Read the real press sometime: former CEO Jeffrey Skilling got 24 years for his part in bringing down Enron from the inside; even a lowly ex-network admin like Terry Childs received a $1.5 fine and four years in the big house for locking out San Francisco's IT systems for a fortnight. What exactly does the resident peanut gallery think the law courts and stockholders would do to Elop were he discovered to be pulling the same shit?

3. Why on Earth would Elop, who has just landed the top job at one of the biggest technology companies in the world, choose 1. to be another CEO's bitch when he's now a CEO himself, and 2. risk huge fines and jail times in the process? I can only assume Thom et al studied at the Chewbacca School of Law and Business, because their 'explanation' makes absolutely no bloody sense whatsoever.


To use the old axiom: "Never ascribe to malice what may adequately be explained by stupidity." I think that accurately describes Elop's tenure, though Thom's I am starting to wonder about...

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