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Former Nokia boss Stephen Elop to receive $25m pay-off
- rbanffy 13y agoWhat annoys me most is not the evident maneuver that benefited Microsoft alone. It's not that Elop will be rewarded for destroying a company. It's the many Nokia employees who lost their jobs thanks to what amounts to be facilitating an acquisition by screwing shareholders and employees. Doesn't Finland have laws about this?
- bsullivan01 13y agoI don't think he destroyed anything, just Nokia got caught off-guard by the iPhone and never recovered. As for choosing Windows Phone over Android, we'll never know and now it's easier to criticize but I would have done the same thing. Sometimes it just doesn't work and companies need to reinvent or die.
- uio3 13y agoMicrosoft "partners" have a history of getting royally screwed. Android was the obvious choice, only a complete idiot (or in this case, a Microsoft mole) would choose otherwise. Not every company needs to reinvent to survive, plenty of companies perform well sticking in a middle ground. As did all the phone manufacturers who used Android...
- pavlov 13y agoExcept for Samsung, all the companies that were in the phone business before the iPhone and then went with Android are doing poorly today: HTC, Motorola, LG...
- corresation 13y agoDo you think that would have happened with Nokia? Their hardware designs and cameras alone would have made them a top tier Android vendor. Their distribution channel would have assured that. HTC, Motorola, Sony and LG essentially make their own beds, and worth noting that pretty much all of them would have been long bankrupt (their phone business, as obviously Sony and LG are much more) sans Android.
- hershel 13y agoI think before the iphone , samsung has started eating nokia's lunch in phones.
- chris_wot 13y agoAgreed. I had an N9, the hardware specs were, quite frankly, amazing. Had Android been the phone's OS, I never would have switched to an iPhone!
- Pxtl 13y agoAnd now Sony is seeing a resurgence because they're recognized the obvious: you can't beat Samsung in the art of putting high-quality equipment in a cheap plastic chassis - they do that incredibly well. You can't beat them in low-quality equipment either, and there's a million no-name Chinese companies that are trying anyways. So Sony is going back to their strong suits - they used to be the company whose design language was copied by Apple. The Xperia line shows they've returned to this form.
- GFischer 13y ago"Their hardware designs and cameras alone would have made them a top tier Android vendor" I believe this to be true: my niece is looking into buying a smartphone with a good camera. The "obvious" choice would be the Nokia 1020... but it's off the table because it runs Windows (she's considering the Xperia Z or the LG Optimus G)
- narag 13y agoWould they be better if they hadn't go with Android? I know, I know: "we'll never know"... as for me, I'm done with HTC and Motorola (three last terminals from them before my Samsung).
- flarg 13y agoIf my memories of Nokia's range of wonderfully resilient, well packaged, highly functional feature and Symbian phones are anything to go by - Nokia would have had a significant slice of the Samsung's Android market. Remember - Nokia delivered the N800 range; they could have done so much with Android.
- GFischer 13y agoYou can look backwards at the "burning platform" thread and discussion: https://news.ycombinator.com/item?id=2195520 https://news.ycombinator.com/item?id=2195520 His memo was hailed as a good move, but even then, many (including myself) were arguing for Nokia moving to Android: SandB0x 954 days ago | https://news.ycombinator.com/item?id=2195699 https://news.ycombinator.com/item?id=2195699 "Please, please, Nokia, adopt Android and put your efforts into making great hardware to go with it, without ruining the interface like so many other manufacturers do." Interestingly, the "trojan horse" hypothesis has been around for at least 2 years: https://news.ycombinator.com/item?id=3928410 https://news.ycombinator.com/item?id=3928410 with some skeptics unable to believe it (it still sounds farfetched, I believe that the cause was incompetence myself). nl 504 days ago "Now, of course, he grasps at a broad conspiracy theory involving Nokia CEO Elop being somehow motivated to deliberately destroy Nokia for Microsoft."
- exDM69 13y agoIt seems evident that the plan all along was for Microsoft to acquire what's left of Nokia. This was probably blessed by the board of directors in strict secrecy. Of course I'm just guessing here, but the more details are surfacing the more it seems like that. Microsoft is paying 70% of the Mr. Elop's reward (source: Finnish news). > Doesn't Finland have laws about this? Finnish laws follow Nokia, not the other way around. See "lex Nokia": http://www.theregister.co.uk/2009/03/06/finland_nokia_snooping/ http://www.theregister.co.uk/2009/03/06/finland_nokia_snoopi...
- waps 13y agoExactly. Especially given Microsofts $250 million prepayment to Nokia. http://www.engadget.com/2012/01/26/microsoft-paid-nokia-250-million-to-adopt-windows-phone-q4-ear/ http://www.engadget.com/2012/01/26/microsoft-paid-nokia-250-...
- yummyfajitas 13y agoHow are the acquired shareholders getting screwed? Was Nokia worth more than $5B at the time of acquisition?
- rbanffy 13y agoNokia was worth much more before Elop announced they would partner with Microsoft.
- throwawaykf02 13y agoNOK had crashed long before Elop was hired. The subsequent decline was due to the leaked memo saying they were scrapping Symbian entirely rather than the move to Windows Phone. The stock would have crashed even if they had announced a move to Android instead. Symbian was the platform on which they rose to dominance, and it was clearly not going to cut it in the new smartphone era, so scrapping it was inevitable. But hearing it from the horses mouth clearly signaled that they had no new tricks up their sleeves and were essentially starting from scratch.
- rbanffy 13y agoWhile there was a sharp drop in early 2010, there is a second drop the day Elop publishes the "burning platform" memo. https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1379707200000&chddm=365306&chls=IntervalBasedLine&q=NYSE:NOK&ntsp=0&ei=Tow8UrD7JaaalgOm-wE https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&...
- throwawaykf02 13y agoOh yeah, the memo was definitely an expensive mistake, as I said elsewhere on this thread. I was just saying the majority of the damage was done before he joined.
- devx 13y ago$15 billion whole, so I think the mobile division was worth at least 2x that, especially if we consider that when acquired, companies usually pay a premium over the market price. Motorola was like $9 billion at the market price when Google bought it for $12.5 billion.
- pavlov 13y agoIf the pre-Elop executives had been left in charge, Nokia would most likely be in bankruptcy today. The imminent collapse in smartphones was exactly the reason why he was hired. Under Elop, the loss-making phone business was streamlined to the point that Nokia's stockholders got $7 billion for it, rather than losing the whole company. For a comparison point, look at BlackBerry. They're basically what Nokia would have become if they had continued on the Symbian+Meego path. Nobody's going to pay 7 billion for BlackBerry at this point.
- rbanffy 13y ago> If the pre-Elop executives had been left in charge, Nokia would most likely be in bankruptcy today. Everybody agrees Nokia needed a change in management. Or, at least, in course. > The imminent collapse in smartphones was exactly the reason why he was hired. I fail to see this collapse now. Unless you mention Nokia's smartphone collapse, on which case I don't see how Elop averted it. > if they had continued on the Symbian+Meego path. I keep seeing this excuse as if Nokia would never change course. You know companies do that sometimes.
- pavlov 13y agoNokia in 2010 was Titanic just before it hit the iceberg. There wasn't any way to navigate around it; the best you could do is soften the blow and manage the salvage operation. Elop managed to bring the ship to New York but with a gaping hole in the bow and 60% of passengers dead at sea. Somebody else might have done better, who knows -- but undoubtedly there was a very real risk of losing the entire ship.
- deleted 13y ago[deleted]
- mathattack 13y agoThis reminds me of John Thain at Merrill. The company was headed for the toilet before he got there. He was the boss as the share price fell through the floor. He found a buyer, then asked for a large bonus. Ultimately he was rebuked, and left the combined company. The difference here... The CEO came from the new buyer, and is getting paid off the acquirer. It certainly looks bad. But... If he was wise enough to sell the company before disaster, there is something to be said for that.
- programminggeek 13y agoI think it would have been cheaper for Microsoft to just build their own devices than go through all of this to buy Nokia.
- devx 13y agoIt was more of a desperate move than a well-planned move that needed to happen. Ballmer cared more about not wanting Nokia to go Android, than about them needing Nokia's hardware division and 35,000 employees.
- rbanffy 13y agoBy building their own phones, they wouldn't get rid of a potential competitor. Without a company the size of Nokia, Windows Phone would be even more irrelevant than it is today.
- mbesto 13y agoYou know what, I think you're right too. But I'm just an armchair M&A analyst. It's about risk reduction and this is a much safer bet than say perhaps, Kin?[0] There are so many dynamics to this, as it's not as simple as you may think. Just a few factors that often get missed: - Cost (and time) of go to market - Cost of marketing - Cost (and time) of branding - Emerging market opportunities This list goes on and on... Unfortunately what is produced as an offshoot of M&A is a whole bunch of people who start pulling at the windfall straws. [0] - http://en.wikipedia.org/wiki/Microsoft_Kin http://en.wikipedia.org/wiki/Microsoft_Kin
- meepmorp 13y agoCheaper, maybe, but this way is probably a faster and less risky means to vertical integration a la Apple; buying Nokia means not having to build out mobile engineering, manufacturing, and supply infrastructure from scratch, as well as (likely) a pipeline of product designs for the next year or two. Plus, it knocks out some competition.
- buster 13y agoNot if you have the opportunity to smash one big opponent. After all Nokia was the biggest phone manufacturer worldwide and if Nokia would have chosen Android and produced high build-quality phones, it could have "easily" become the top smartphone manufacturer again, or atleast number 2. Now Microsoft has one enemy less and gained a company that was known for it's high-quality phones for years.
- dandrews 13y agoEllison: "Every ecosystem needs a scavenger". (Referring specifically to CA, and quoted by Marc Benioff here: http://www.blnz.com/news/2008/02/19/SaaS_Have_Breakout_Accepted_7338.html http://www.blnz.com/news/2008/02/19/SaaS_Have_Breakout_Accep... )
- Fuxy 13y agoNokia had an interesting vantage point. Usually disruptors start with a very low end non significant part of the market and chase competitor gradually out. That's what they were left with after the unexpected smartphone boom. So the chance for them to recover was there with a small shift in strategy but after they gave that up and bet everything on Microsoft they got doomed.
- cja 13y agoIt was obvious that Nokia should have gone with Android because of its popularity versus Windows Phone. Elop surely guided them towards Microsoft even though it was the inferior option. Imagine if Nokia had gone with Android two years ago. Nokia's build quality and cameras plus pure Android versus Samsung's build quality and Touchwiz would have made Nokia the obvious choice for many smartphone buyers. I'd kill for a Nokia Android phone.
- throwawaykf02 13y agoIn the interest of DRY: Yay-sayers: "That's not obvious at all -- look at all Android manufacturers other than Samsung" Nay-Sayers: "Nokia had the capability to sufficiently differentiate their hardware to avoid the fate of LG, HTC et al." Neutral: "We'll never really know."