Tuesday, 3 September 2013

NEWS: Tech: Nokia Sells Handset Business To Microsoft At A Shockingly Low Price of 7.2 billion dollars

Painful but Necessary, The decision to sell Nokia's
devices and services division to
Microsoft for $7.2 billion was a
difficult choice, but market
dynamics meant it was the only
practical one, the Finnish
company's outgoing CEO Stephen
Elop and interim CEO Risto
Siilasmaa said Tuesday.

"We need more combined muscle
to truly break through with
consumers," Elop said in a press
conference in Espoo, Finland,
where Nokia has its headquarters.

"I share the frustration that comes
from being so far behind two very
large competitors," he added,
referring to Apple's iOS Google's
Android, but argued that "our goal
of becoming the third ecosystem is
becoming real."

Why would Nokia opt to sell the handset operations just
as the success of the low-end models is returning the
smartphone unit to growth track? It is possible that the
feature phone sales collapse has turned into such a red
rout that Nokia felt it had to push the panic button right
now. The Asha range of premium feature phone models
had a surprisingly perky year in 2012, but suffered
grievously from low-end Android vendor aggression in
Africa, Latin America and Asia in the first half of 2013. It
could be that the latest wave of $100-130 smartphones
from Google's Asian allies has pushed Nokia's feature
phone business into such a tail spin that immediate
measures were necessary. Apple's new value iPhone
may be about to put pressure on Nokia's high-end Lumia
Nevertheless, the motivation of Stephen Elop will now
come under intense scrutiny. Elop came from Microsoft
and decided very quickly that Windows was the only
hope for Nokia's smartphone unit, which was still selling
more than 24 M units per quarter in early 2011. After he
eliminated all alternative operating system options, he
has now decided to sell Nokia's smartphone unit at a
notably low price… to Microsoft, the company he will now
You don't need to be a Finn to take a moment to wonder
whether Elop's loyalties have been entirely undivided
over the past few years.
Sourced from BBC and Forbes.com

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