5 ms·

The Nokia fate will be remembered as hostile takeover. Everything worked out in the favor of Microsoft in the end. Though Windows Phone/Tablet have low market s

by frik 13y ago

The Nokia fate will be remembered as hostile takeover. Everything worked out in the favor of Microsoft in the end. Though Windows Phone/Tablet have low market share, a lot lower than expected. * Stephen Elop the former Microsoft employee (head of the Business Division) and later Nokia CEO with his infamous "Burning Platform" memo: http://en.wikipedia.org/wiki/Stephen_Elop#CEO_of_Nokia http://en.wikipedia.org/wiki/Stephen_Elop#CEO_of_Nokia * Some former Nokia employees called it "Elop = hostile takeover of a company for a minimum price through CEO infiltration": http://gizmodo.com/how-nokia-employees-are-reacting-to-the-microsoft-takeo-1243832372 http://gizmodo.com/how-nokia-employees-are-reacting-to-the-m...

tinco 13y ago
Lower than expected? Whose expectance? Given Microsofts track record in mobile devices I think no one expected Microsoft to really be able to compete. And given Nokia's track record in smart phones, nobody expected Nokia to be able to push Microsoft up either. But as it is now, it seems they've actually been able to. They've managed to punch a small but significant hole in the Android market, against all odds, by building some truly excellent products. Who'd have thought Microsoft would some day produce an integrated mobile product that you could prefer over an Apple product without being made out a fool?
- waps 13y ago
  From the wikipedia page. > During Elop's tenure, Nokia annual revenues fell 40% from 41.7 Billion Euros per year to 25.3 Billion Euros per year. Nokia profits fell 92% from 2.4 Billion Euros per year to 188 Million Euros per year. Nokia handset sales fell 40% from 456 million units per year to 274 million units per year. Nokia share price which was at 7.12 Euros on the day Elop was hired, had fallen to 81% to a bottom level of 1.44 Euros two years later, after which it began trading at 4.14 Euros, up 36% on the day. Elop's success in negotiating the sale of Nokia's struggling mobile device business to Microsoft has been described by many securities analysts as a significant victory for NOK shareholders, particularly when viewed in context of failed efforts by Blackberry or HP to secure value for handset business owned by those companies. I had to reread it 5 times. I am still not convinced. Yes, that last sentence gives me the impression it has the words "significant victory" and "success", but my brain is simply unwilling to accept that as a valid conclusion. Maybe I should start working in business ...
bowlofpetunias 13y ago
I'm thinking more "inside job" that ended in a takeover. Hostile takeovers may be brutal, but at least they are relatively "clean" compared to what Microsoft did. The takeover is not the remarkable part of this story, that was just the endgame. I'm still surprised this was actually legal. I'm also surprised that the Finnish authorities just let this happen without at least a legal investigation or parliament hearings.
- ntakasaki 13y ago
  This guy was the chairman of the board at the time. Does it seem like he wouldn't do best for his company and risk national disgrace, all for what must be pennies to him? http://en.wikipedia.org/wiki/Jorma_Ollila http://en.wikipedia.org/wiki/Jorma_Ollila I believe he genuinely thought it was a good deal for Nokia and MS didn't really do anything but give better terms than Google was willing to give.
Hominem 13y ago
I figure how Elop pitched himself was "Let's try something crazy, and hey, we always have a plan B, I have an in at Microsoft." CEOs may have significant power, but they can't just sell the company with no buy in from major shareholders.
- frik 13y ago
  True, major Microsoft shareholders were also major Nokia shareholders. compare http://finance.yahoo.com/q/mh?s=MSFT http://finance.yahoo.com/q/mh?s=MSFT and http://finance.yahoo.com/q/mh?s=NOK http://finance.yahoo.com/q/mh?s=NOK
  - ntakasaki 13y ago
    Which specific shareholders are you referring to from those lists?
- tanzam75 13y ago
  99.52% of votes were cast in favor of the Microsoft acquisition at Nokia's Extraordinary General Meeting on November 19, 2013. But that's not what makes this a friendly takeover, because shareholders also have to approve hostile takeovers. This acquisition is a friendly takeover because the Board is in favor.
kyrra 13y ago
But Nokia was a company that was already starting to falter when Elop came on board. What else could the company have done to survive? Their options seem limited from what we know about the marketplace. They could have release an android phone, but then they just would have been fighting for a piece of the pie that Samsung, Moto, and other phone makers are eating. They could have stayed with their phone OS and probably would have had just about the same fate as picking up Windows Mobile. Maybe they would have had more sales with an Android phone, but I'm not sure it would have made a bit enough difference to prevent this buyout. Elop set Nokia up to be bought out by being a major windows phone maker. It may have been a better long-term bet than Android.
- jsight 13y ago
  Fighting for share of the pie in the Android market would have created far more sales than fighting for crumbs of a virtually non-existent pie in the Windows market. Having said that, I agree with your final point. If you view the whole thing as a setup to extract maximum value via an acquisition, it might make sense. They may have been worth more as a MS acquisition target selling Windows phones than they would have been had they gone down the Android path. It's entirely possible that neither path would have led to sustainability as a standalone entity.
  - Varcht 13y ago
    I think it is safe to say they had at least a slice of Windows Phone leaving the others to fight over the crumbs. With Windows Phone at around 4% of the market Nokia had most of that. The question then is could they have grabbed 5% of the Android market.
  - nyrina 13y ago
    Especially due to the name Nokia. If you gave me a choice between Nokia and HTC, I know what I would choose - based purely on reputation
  - cmelbye 13y ago
    A small correction: They weren't fighting for the crumbs of Windows Phone, they were eating the whole pie (save a small slice for HTC and a tiny sliver for Samsung).
Yhippa 13y ago
Anybody remember these ridiculous predictions from yesteryear: http://www.globalnerdy.com/2012/05/07/the-windows-phone-predictions-that-idc-gartner-and-pyramid-research-probably-hope-youve-forgotten/ http://www.globalnerdy.com/2012/05/07/the-windows-phone-pred...

by frik 13y ago

tinco 13y ago

Lower than expected? Whose expectance? Given Microsofts track record in mobile devices I think no one expected Microsoft to really be able to compete. And given Nokia's track record in smart phones, nobody expected Nokia to be able to push Microsoft up either. But as it is now, it seems they've actually been able to. They've managed to punch a small but significant hole in the Android market, against all odds, by building some truly excellent products. Who'd have thought Microsoft would some day produce an integrated mobile product that you could prefer over an Apple product without being made out a fool?

waps 13y ago
From the wikipedia page. > During Elop's tenure, Nokia annual revenues fell 40% from 41.7 Billion Euros per year to 25.3 Billion Euros per year. Nokia profits fell 92% from 2.4 Billion Euros per year to 188 Million Euros per year. Nokia handset sales fell 40% from 456 million units per year to 274 million units per year. Nokia share price which was at 7.12 Euros on the day Elop was hired, had fallen to 81% to a bottom level of 1.44 Euros two years later, after which it began trading at 4.14 Euros, up 36% on the day. Elop's success in negotiating the sale of Nokia's struggling mobile device business to Microsoft has been described by many securities analysts as a significant victory for NOK shareholders, particularly when viewed in context of failed efforts by Blackberry or HP to secure value for handset business owned by those companies. I had to reread it 5 times. I am still not convinced. Yes, that last sentence gives me the impression it has the words "significant victory" and "success", but my brain is simply unwilling to accept that as a valid conclusion. Maybe I should start working in business ...

bowlofpetunias 13y ago

I'm thinking more "inside job" that ended in a takeover. Hostile takeovers may be brutal, but at least they are relatively "clean" compared to what Microsoft did. The takeover is not the remarkable part of this story, that was just the endgame. I'm still surprised this was actually legal. I'm also surprised that the Finnish authorities just let this happen without at least a legal investigation or parliament hearings.

ntakasaki 13y ago
This guy was the chairman of the board at the time. Does it seem like he wouldn't do best for his company and risk national disgrace, all for what must be pennies to him? http://en.wikipedia.org/wiki/Jorma_Ollila http://en.wikipedia.org/wiki/Jorma_Ollila I believe he genuinely thought it was a good deal for Nokia and MS didn't really do anything but give better terms than Google was willing to give.

Hominem 13y ago

I figure how Elop pitched himself was "Let's try something crazy, and hey, we always have a plan B, I have an in at Microsoft." CEOs may have significant power, but they can't just sell the company with no buy in from major shareholders.

frik 13y ago
True, major Microsoft shareholders were also major Nokia shareholders. compare http://finance.yahoo.com/q/mh?s=MSFT http://finance.yahoo.com/q/mh?s=MSFT and http://finance.yahoo.com/q/mh?s=NOK http://finance.yahoo.com/q/mh?s=NOK
- ntakasaki 13y ago
  Which specific shareholders are you referring to from those lists?
tanzam75 13y ago
99.52% of votes were cast in favor of the Microsoft acquisition at Nokia's Extraordinary General Meeting on November 19, 2013. But that's not what makes this a friendly takeover, because shareholders also have to approve hostile takeovers. This acquisition is a friendly takeover because the Board is in favor.

kyrra 13y ago

But Nokia was a company that was already starting to falter when Elop came on board. What else could the company have done to survive? Their options seem limited from what we know about the marketplace. They could have release an android phone, but then they just would have been fighting for a piece of the pie that Samsung, Moto, and other phone makers are eating. They could have stayed with their phone OS and probably would have had just about the same fate as picking up Windows Mobile. Maybe they would have had more sales with an Android phone, but I'm not sure it would have made a bit enough difference to prevent this buyout. Elop set Nokia up to be bought out by being a major windows phone maker. It may have been a better long-term bet than Android.

jsight 13y ago
Fighting for share of the pie in the Android market would have created far more sales than fighting for crumbs of a virtually non-existent pie in the Windows market. Having said that, I agree with your final point. If you view the whole thing as a setup to extract maximum value via an acquisition, it might make sense. They may have been worth more as a MS acquisition target selling Windows phones than they would have been had they gone down the Android path. It's entirely possible that neither path would have led to sustainability as a standalone entity.
- Varcht 13y ago
  I think it is safe to say they had at least a slice of Windows Phone leaving the others to fight over the crumbs. With Windows Phone at around 4% of the market Nokia had most of that. The question then is could they have grabbed 5% of the Android market.
- nyrina 13y ago
  Especially due to the name Nokia. If you gave me a choice between Nokia and HTC, I know what I would choose - based purely on reputation
- cmelbye 13y ago
  A small correction: They weren't fighting for the crumbs of Windows Phone, they were eating the whole pie (save a small slice for HTC and a tiny sliver for Samsung).

Yhippa 13y ago

Anybody remember these ridiculous predictions from yesteryear: http://www.globalnerdy.com/2012/05/07/the-windows-phone-predictions-that-idc-gartner-and-pyramid-research-probably-hope-youve-forgotten/ http://www.globalnerdy.com/2012/05/07/the-windows-phone-pred...