The $7.2-billion Nokia rig that Microsoft may have burned, crashed and Elop-ed
The story of how Nokia's former CEO Stephen Elop's decisions led to both Nokia and Microsoft paying a huge price.
“Nokia, our platform is burning.”
Stephen Elop, the erstwhile chief executive of Nokia wrote these words in a memo to the employees of the battered phonemaker in 2011.
Much has changed since then. Elop, who then drew an analogy with a man on a burning oil platform, has jumped the ship. Twice.
Elop who was initially with Microsoft before taking charge at Nokia, made a series of decisions that not only sealed the fate of Nokia, but also Microsoft's, to a certain extent.
Not only did he engineer the sale of Nokia’s handset business to Microsoft (in 2014) for $7.2 billion, he then went back to Microsoft to handle the business.
Microsoft then killed Nokia's handsets from its portfolio.
Now, in 2016, Microsoft has decided to sell certain branding and other rights to a Finnish company for $350 million. Yes.
What has happened?
Earlier this week, the Finland-based iconic phonemaker, Nokia said that it is returning to the business it has been known for over the past quarter of a century — mobile phones.
Although, not quite the same deal, but Nokia said that it will grant branding rights and intellectual property rights to another company to make ‘Nokia’ phones for the next 10 years.
That other company is HMD Global Oy (HMD).
Nokia also said, “To complete its portfolio of Nokia branding rights, HMD announced today that it has conditionally agreed to acquire from Microsoft the rights to use the Nokia brand on feature phones, and certain related design rights.”
Microsoft's $7.2 billion mistake
Microsoft paid $7.2 billion to Nokia in 2014 to buy out the handset business.
Now, Microsoft is selling the business to Foxconn’s subsidiary for only $350 million.
That's not all.
Over the past two years, Microsoft wrote off over $7.5 billion in charges related to this handset business and fired nearly 8,000 employees, mostly belonging to this handset business.
The company is now doing what it should have since the death of MeeGo and Symbian. Go to Android.
Nokia, in a statement, said, “HMD's new smartphone and tablet portfolio will be based on Android, uniting one of the world's iconic mobile brands with the leading mobile operating system and app development community.”
Nokia-branded feature phones have undoubtedly been one of the most popular choice of mobile phones in many markets around the world. The company’s return to the smartphone market with Android is bound to give sleepless nights to Samsung and Apple.
Many said that Nokia was Finnished. But is it?
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.