So What Value in Nokia Then? Considering Post Google-Motorola Purchase

So a few hours after I heard about the Google Motorola purchase, am more and more convinced the world will see now a bidding frenzy for Nokia. Nokia will be sold. And because Nokia's assets are so diverse (within the mobile space) I am also sure that whoever ends up buying Nokia, will then split it into some parts, because it won't make sense to hang onto all of the parts, and there will be plenty of hungry interested parties who would be willing to buy a piece of Nokia's remains. Lets explore these a bit. You may be surprised.

THREE HANDSET UNITS

First, we have the strange notion that Nokia actually is three separate handset companies. One is the cheap phones maker, which Nokia itself calls its 'featuresphones' unit. Then there is the current smartphones unit which is witnessing catastrophic sales collapse worldwide. That unit invented the smartphone and runs on the world's most widely used smartphone OS, called Symbian. The 'conventional wisdom' says that Symbian is a dead OS - but as we do on this blog, we don't deal with myths, we deal with the facts. We'll explore Symbian and Nokia's smartphones unit here in just a moment. You may be surprised.

And then there is something called MeeGo. This is the newest smart operating system for smartphones and tablet PCs and netbooks, which has had its first devices (netbooks and tablets) released this spring. The world's first smartphone sold on MeeGo is Nokia's hot new N9 and Nokia actually has several other smartphones ready to manufacture and sell using MeeGo. Note none of these are Microsoft's Windows Phone (those phones are not even manufactured by Nokia, the first Microsoft based smartphones will be subcontracted to Taiwan-based Compal. The tech press has gone gaga over MeeGo and the N9, some even calling it the 'godphone' (where the iPhone was called the jesusphone) and many think Nokia's N9 is its biggest hit ever, but idiot CEO Stephen Elop is refusing to sell the N9 in most of Nokia's strongest markets like the UK, Germany etc, and even in markets where Nokia has suffered in the past like the USA. So unless Microsoft buys Nokia, any other owner will immediately terminate the Microsoft madness and fully launch a series of 4 MeeGo based Nokia smartphones now in 2011 and many more in 2012.

THE BRAND

So thats three handset units right there. But Nokia is much more than that. Nokia is also the Nokia brand, what was quite recently one of the 20 most valuable brands in the world. While it has suffered in the past few years and has been badly damaged by CEO Stephen Elop's lunatic statements this year - I wrote the blog coining the term Elop Effect which combines the Osborne Effect and the Ratner Effect, as the most damaging CEO statements in the economic history of mankind - the Nokia brand is still strong in many parts of the world. We just heard last week that in South Africa for example (population 50 million) Nokia is the strongest phone brand and more people intended to buy a Nokia next year, than currently own a Nokia, so it is likely to grow there.. Similarly Nokia is still the bestselling phone brand of India, of China, of Brazil etc.

So I think whoever buys Nokia, in most cases will be a strong brand in the mobile space already and probably doesn't 'need' the Nokia brand. For example, Apple would never bother to try to sell Nokia brand alongside the Apple brand. Or Samsung would not see any real value in adding the Nokia brand to its portfolio, so the brand is likely to be sold. It might be sold as part of one of the handset units, but could also be sold independently. Remember Rolls Royce and Bentley? They were part of the same company, but the Rolls Royce brand was far more valuable than Bentley. So the owners split it so, that whoever bought Rolls Royce, only got the brand (inlcuding the flying lady hood ornament, the double RR logo and the iconic Rolls Royce grille design) but the other buyer would get the full Rolls Royce factory and the Bentley brand. So if you bought the first independent Rolls Royce it was actually less of a 'real' Rolls Royce than the Bentley of the same time which at least came from the original Rolls Royce factory..

I think the new owners of Nokia will do that with the Nokia brand, it will be sold as a separate entity. I think the Nokia brand would be very interesting to many smaller handset manufacturers out of China and other parts of Asia, so it could be sold to a Huawei or ZTE or G'Five etc who could then use the Nokia brand to provide a premium product within their products, for example as the brand for their smartphones.

NOKIA SIEMENS NETWORKS

I am not an expert in the valuation of brands haha. But we can discuss NokiaSiemens Networks. That unit, worth roughly one third of total Nokia revenues, has about half of Nokia's total number of employees (so roughly speaking about 60,000 staff) and made revenues of about 12 Billion Euros (17.4 Billion dollars in 2010), and was slightly profitable. Note, 19 Billion dollars in annual sales would get you into the Fortune Global 500, so NSN is nearly big enough to be a Global Fortune 500 corporation all by itself. In size the NSN unit is the third biggest telecoms infrastructure provider behind Sweden's Ericsson and China's Huawei. NSN has been somewhat of a 'recovery project'. Nokia Networks was a (slightly) profitable division of Nokia, then it acquired the loss-making networking unit of Siemens. Nokia turned that around and just after NSN was back to making profits, the Nokia management bought Motorola's loss-making networks division and that plunged NSN back into making losses, but they are now on track again to recover the networks unit to slight profitability. Very many analysts say that there is little synergy between a networks unit and a handsets unit, so almost whoever were to buy Nokia, would end up selling one side or the other. But there would be plenty of tech companies that could find considerable value in Nokia's huge global telecoms networks customer base, its deep patents portfolio in this area, its very deep engineering competence and factories producing very complex and expensive telecoms networking gear (potentially profitably). So if a Cisco wanted to go full steam into mobile, it might want to buy the networks side of Nokia while not wanting the handsets. Or a Huawei or Alcatel-Lucent could want to take the networks side of Nokia to bolster their scale and customer reach in the global battle against Ericsson etc..

The problem with NSN is that the owners are split, between Nokia and Siemens 50/50 ownership so whoever buys Nokia can't just sell NSN, they would have to convice Siemens to sell its part obviously. And recently Nokia had attracted three buyers but the final negotiations broke down and none of the three ended up making an offer for NSN. So this is not the hottest part of Nokia and its sale might take a long while and might have to be given away at cost or even at a loss.

NAVTEQ

The location-based mapping and advertising arm of Nokia, Navteq is the smallest of its four reporting divisions (smartphones, dumbphones, networks and Navteq). Their sales in the latest Q2 results were about one quarter of a Billion Euros, so in total Navteq has about 1 Billion Euros (1.45 Billion dollars) of annual sales (and made a loss). It has a couple of thousand employees. But its a hot area, mapping, navigation and mobile advertising, so this unit could get a big premium on its sale. This unit should be of interest to just about anyone who doesn't have a mapping solution (so not to Google haha) even including Apple. Anyone 'serious' in smartphones would probably want to bid on it, starting with HTC, RIM, Samsung etc. But yes, since its not making a profit, and its only a small unit by revenues, this is not the big part of whats on offer. But I think it legitimately ranks in the crown jewels. And depending on the buyer, it could be part of the piece that the original buyer of Nokia ends up wanting to keep.

PATENTS PORTFOLIO

The biggest value of any Nokia components is its huge patents portfolio. Nokia invented the smartphone, Nokia has been very busy innovating in the mobile space and also has meticulously pursued the intellectual property of all of its inventions (I remember from my times as a lowly product manager early in my Nokia career, that one of our milestones in the product development process was considering the intellectual property opportunities haha, that was a long while ago, gosh, time flies). Just as a sign of how strong Nokia's patent portfolio is, the lawsuits with Apple resulted in a settlement where Apple pays Nokia a one-time penalty fee for Nokia's patent infringements over the past 4 years of the iPhone - and new unique handset royalty payments for every iPhone sold, into perpetuity.

What is the value of that? We do not know. The rumor mill has been suggesting Apple pays 11.50 US dollars per iPhone to Nokia. We do know some royalty payments range from $5 to $15 so it would be in the right ballpark. If we use the $11.50 figure, then Nokia earns just out of Apple nearly one Billion dollars on an annual basis this year. Then there would be all other licencees (and if the new owner was in a litigious mood, they could sue some newer makers as well for even more royalties). If Google paid 12.5 Billion dollars for Motorola Mobility and one of its biggest motivators was the patents portfolio - Nokia's is bigger, and so if we value cautiously the patents at Motorola say at one third that, at 4 Billion dollars, then Nokia's patents might be worth what, 6 maybe 8 Billion dollars. Again, I am not an IPR lawyer haha but this is one of the parts of the crown jewels and in most cases, this will be a driver for whoever ends up buying Nokia. They must be a player who REALLY wants to be one of the true top dogs in mobile, who will value the long term use of the patents portfolio. But it could be that some buyer wants some other parts, and is not interested in becoming a handset maker and could even sell that portfolio (or parts of it).

OVI STORE

So then before we get to the three handset units, there is the big ecosystem. I wrote on this blog that while Stephen Elop dismissed the Nokia ecosystem as dead in his 'burning platfoms' memo (the costliest CEO memo of all time, and reason all alone for Elop being fired on day 1 of the new owners taking charge)  in reality the Nokia ecosystem for its smartphones was BY FAR the strongest, Nokia had more than twice the user number of the iPhone or Android (and was still selling more than either when Elop took charge). Nokia's developer community was by far the biggest. Nokia's carrier relationship - a sales multiplier - including the highly caveted carrier billing - was the world's biggest by far. Even if measured by the Apple loyalist favorite measure, downloads at the app store - even though Nokia's Ovi had been around for barely half as long as the Apple iPhone App Store, by the end of last year, Nokia's Ovi Store had passed all others like RIM's Blackberry or Microsoft's Windows Mobile or HP's Palm WebOS etc app stores, and had become the second most used app store if measured by number of downloads. The Nokia Ovi branded app store is definitely a major asset (one that Nokia's CEO is now trying to kill by destroying the brand). The interesting play with Ovi is, that Ovi Store not only supports Nokia's Symbian based smartphones, it also supports Nokia's cheaper featurephones running the S40 operating system. And with Nokia's migration strategy, the intention was that Ovi Store would also support MeeGo premium smartphone application sales.

What is the value of the world's second most used app store, that has the world's biggest customer base by reach? The App Store that reaches more than twice as many pockets than Apple's iPhone App Store? The only app store that has 'carrier billing' (the most desirable form of payment collection, allowing one-click payments directly to your phone bill, rather than entering credit card info etc) for over 100 carriers worldwide and supports over 30 languages. The App Store would be kept by the buyer if they want to be a player in smartphones - except obviously not if they already have their own app store - consider Apple iPhone, Google Android - or who might want to use parts of the Ovi store to enhance their own app store (ie Microsoft Windows Phone, Hewlett-Packard Palm/WebOS, Samsung bada). But this yes would have to be valued in the billion dollar plus valuation, the world's biggest software store by reach and second most used by traffic. This asset could even be sold to a major carrier group like Vodafone or Telefonica or T-Mobile etc to consider as their app store haha, but yes, most likely the buyer keeps Ovi, or else bundles it with one of the smartphone unit sales (see below).

ENGINEERING STAFF

Then lets talk employees. The NokiaSiemens Networking unit has about 60,000 employees, and their fate depends somewhat on Siemens and their competence is in the infrastructure side, so not necessarily of interest to all players in 'mobile'. But the rest of the engineers? The rest of Nokia staff is another 60,000 and a large part of Nokia's total staff are engineers. Nokia's engineering, R&D and design competence is totally second to none. Even after CEO Elop has been firing thousands of Nokia staff almost monthly, there is an abundance of extremely highly-trained, highly-competent, highly-desirable skills in very rare areas of very hard-to-find knowhow. Almost all who work in the tech space, say the 'mobile' side of the competence is the most complex and hardest to find. Nokia is overloaded with that skill - and as Nokia was known as a 'job for life' type of employer, where the monthly pay is low but the values of the company were of the kind you would feel comfortable staying there - many of Nokia's staff are vastly underpriced in their salary structure, compared to rivals. So if you were a tech company who wanted to boost your staff by say 10,000 new staff in super-competent mobile skills from radio competence (Apple?) to location to content to messaging to voice to video to whatever, this is perhaps the cheapest concentration of top level skill. No matter who buys Nokia will probably do a 'cull' of some of the best talent from Nokia's deep pools and augment their own units.

FACTORIES

Nokia has factories the world over. There are factories over at the networks side, but in handsets I think Nokia recently said they operate factories in nine countries. I have personally visited for example at their Beijing facility which is the world's biggest handset factory. And some of the premium superphone manufacturing ability is still in Finland, where new super killerphones like the N9 come from. So if you are currently in the handsets business, whether very high-end phones like Apple, or very low-cost phones like ZTE, Nokia would have facilities to instantly upgrade your production ability. And Nokia has those factories at most of the biggest markets too, from India to Brazil, so if you have a national focus need, then a Nokia factory already running in the big country you want to dominate, could be useful. In practise, probably the Nokia factories would be divided among the three phone brands as per below.

RESOURCING

As part of Nokia's competitive advantage - did you know, that until this Spring's Elop Effect, the Nokia handset division is the only major handset maker which had never - ever - produced a loss? The only quarter when Nokia Corporation produced a loss in the past decade, was caused by the Networks unit, and the Handsets unit still made a profit even in that quarter. All of Nokia's major handset maker rivals, Samsung, Motorola, SonyEricsson, Motorola etc - have all produced losses in their handset units, but not Nokia (until the Microsoft Madness of Stephen Elop's misguided strategy this Spring). The resourcing of components and supplies has been a core Nokia competence and source of competitive advantage (up to February 10 of this year obviously). This part of Nokia's competence could be a unit all by itself - sold perhaps to a loss-maker handset rival like LG or SonyEricsson now or sold either with dumbphones or Symbian smartphones unit here below.

CARRIER RELATIONSHIPS AND RESALE CHANNEL

Another massive competitive advantage Nokia has held for over a decade is its world-leading carrier relationships. Nokia is the only brand that is known in every country on the planet and the carrier relationships and management of the resale channel is what has enabled that global success. Nokia branded phones are used by over 1.3 Billion (today almost 1.4 Billion) people daily, that is far more than who drink a Coca Cola, or smoke a Marlboro, or wear Levi's Jeans or walk around in Nike shoes or write with a Bic pen. Up until the Elop Effect kicked in fully this Q2, for many years Nokia had been shipping more than 1 million mobile phones sold daily. Daily!  If anyone removed Stephen Elop and reversed his idiotic strategies, Nokia would instantly jump back to one million handsets sold daily (and recover to modest profits while doing that too).

This is the hardest job in mobile, building those carrier relationships takes years of meticulous business-to-business sales, accepting the rejection, cajoling, apologizing, trialing, pushing products, taking CEO's and buyers to the major sporting events like Football World Championships and Formula One races and the Superbowl and begging for more business, and then when getting it, supporting it with marketing, co-branding, handset customization etc etc etc. A long long long process. And Nokia has BY FAR the biggest and most powerful carrier relationships built the world over. I would say, that after only the R&D engineering competence and the patents portfolio, this, the carrier relationships, is the most time-consuming asset to build and has incredible value.

This assett would probably be split according to the three phone brands, certainly the sales of low-cost basic 'dumbphones' is a different type of sales process, to the topmost smartphones, and their markets would be different etc. I would see the salesforce split probably into two, one for dumbphone sales unit, and one smartphone sales for the new owner to massively boost its smartphone sales (RIM, Apple, Samsung, HTC, etc) or else if the new owner didn't want to sell smarpthones, then bundled with the Symbian unit. Ok, now the last three major assets: the three handset units.

DUMBPHONES UNIT.

The Nokia 'featurephones' ie dumbphones unit is now in trouble, thanks to the Elop Effect. But lets go back only six months, and examine what is the value of this unit. The Elop Effect for dumbphones can be mostly reversed with minimal effort (fire Elop, cancel Microsoft and restore Qt migration path ie Symbian, S40 and MeeGo). It won't get Nokia exactly back to where it was, but probably very close, with the dumbphones unit. Most dumbphone buyers worldwide have no concept of who or what is an Elop, what is Symbian, what is Microsoft, what is Windows Phone, and couldn't care less what OS is on their phone. They have maybe 100 dollars to spend, won't care about is it 'smart' or not, but would like a nice camera, a nice color screen, easy messaging etc. The average user worldwide. Most of the phones sold in India, Africa, Brazil, Mexico, China, Russia, Indonesia etc. Not the affluent rich, but the avarage user. They own a Nokia today, they are happy with it, and if the store sales rep was willing to sell another Nokia today, they would make an instant sale. But Nokia is facing a reseller boycott because of the Elop Effect. The desirablity of Nokia branded featurephones has not collapsed, only the sales channel interest in selling an obsolete Nokia phone..  So this effect is mostly reversable.

Lets go to Q4 of 2010, six months ago, just before the Elop Effect. Nokia sold 95 million 'dumbphones' in the quarter, earned 4 Billion Euros of revenues. Originally Nokia did not break down its profitability by division, but with its revised accounting, it gave us that info this summer. So we now know the dumbphones unit earned 470 million dollars of operating profit in Q4. When we multiply those by 4 to get a rough count of what Nokia should have been in 2011 (before the Elop Effect), Nokia's dumbphones unit is worth about 16 Billion Euros (23 Billion US dollars) in sales revenues annually generating a profit of 1.9 Billion dollars (2.7 Billion US dollars). How big is that?

If split into its own unit, the dumbphones side of Nokia would be as an independent company, the 423rd biggest company in the Global Fortune 500 listing and by profits, would be ranked 225th most profitable company!). They'd still own easily the world's biggest market share in mobile phones (even after the smartphones are removed, this Nokia dumbphones unit would be bigger than number 2 - Samsung - even if Samsung adds both its dumbphones AND its smarpthones).

Like I said, the brand would probably be a separate issue, but consider anyone who wants to be a Top 5 handset maker or to challenge Samsung for number 1? Take LG or ZTE or Huawei. Easily find tremendous value in acquiring this asset. A HUGELY profitable handset manufacturing juggernaut, which is only making losses now because of management madness by incompetent CEO Stephen Elop. Any clown in charge would instantly turn that unit back into profitability if Elop and Nokia's Microsoft misadventure was terminated. By terminated, I mean Elop's job terminated, haha, not to be physically terminated as in a James Bond termination job haha..

There probably would need to be a transition time for brand co-ownership and then someone would take sole ownership of Nokia brand and the other(s) would have to rebrand their part of the package. But consider, this dumbphone unit from Nokia alone is nearly as big as Google was before it bought Motorola! A little bit smaller than Oracle or Ericsson (the networks guys not the handset guys) and a bit bigger than Acenture, Lenovo or Alcatel-Lucent. By revenues this dumbphones unit would be significantly bigger than for example RIM the world's fourth-biggest smartphone maker.

And remember, differing from the dumbphones on most other rival brands, the Nokia featurephones running Nokia's S40 platform, are a kind of mid-ground 'almost' smartphone - they accept apps! They are fully capable of using the Ovi store. So while they are not anywhere in the same league as an iPhone or Android handset, for the very low cost markets, these are the 'poor man's smartphone'. They can do the full internet, can do app downloads, and have very nice specs for the roughly 50 dollar to 100 dollar and below price points.

I would think the buyer of this unit would be 'most interested' in acquiring the Nokia brand too, so it would make most sense to sell the brand here, a bit like how Rolls Royce brand and factory were split.

NOKIA SYMBIAN SMARTPHONES

So then the most dead of any dead smartphones, ever. Or maybe not. Yes. Symbian. It is true, that Elop has been torpedoing Symbian ever since he took office and his Burning Platforms memo and his Microsoft announcement have done irreparable damage to Symbian. Just to be perfectly clear - Nokia had failed int the US market. But on all other five of the six inhabited continents - and remember, that is where 92% of the planet's population lives - on all those other five continents, Asia, Africa, Europe, Latin America and Oceania/Australia - on those continents - all of them - Nokia's Symbian based smartphones were the leading smartphone - yes, the best-selling smartphone as recently as February 10, 2011. Nokia utterly dominated the biggest markets, in China its market share was measured north of 70%, in India over 60% of smartphones and in all of Africa Nokia had over 80% market share. With Asia and Africa that covers over 5 out of the 7 Billion people alive on the planet! And most analysts of the phone market say that during this decade, all 'dumbphones' will become smartphones - and for most of those people, they cannot afford an iPhone costing 600 dollars (when paying full price without handset subsidy of the 2 year contract). They will want low-cost smartphones. Like Nokia's Symbian smartphones - that were designed to operate on low-cost components, modest power CPUs and low amounts of memory etc.

Today Symbian is truly dying. Nokia's smarpthones have fallen behind Apple's iPhone and Samsung's smarpthones into third place. But just six months ago, Nokia was not just ranked number 1, they were as big as Apple iPhone and all Samsung smartphones - combined! That is dominance! That is what Stephen Elop had in his pocket, when he went mad and issued the Burning Platforms memo (causing the Ratner Effect) and destroyed the sales of Nokia smartphones with his Moment of Microsoft Madness (which caused the Osborne Effect) which caused the biggest collapse of sales of any leading global brand ever in the economic history of mankind (and caused the Elop Effect). So again, we cannot examine Nokia Symbian smartphone sales today. Elop destroyed that profit-juggernaut. But lets go back six months and see what Nokia had.

In Q4 of 2010, Nokia reported not declining smartphone sales as one might think - Nokia reported growth in unit sales of 7% from Q3. Yes. I know I know I know, the 'conventional wisdom' suggests that Nokia's Symbian was dying. It WAS true, it HAD been dying - the operative word being 'been'. It was not dying anymore. Check out the facts: Nokia smartphone unit average sales price shot up by a Nokia record of 14% from the previous quarter! Normally Nokia standard decline in ASP was about 7% as Nokia was migrating its customers and smartphones to lower-cost phones. So Nokia increased unit sales AND it increased prices? WOW. There is absolutely no way that anyone can say, that Nokia's Symbian phones were somehow obsolete, or dying, or undesirable! They grew unit sales and established a Nokia record for the jump in average prices. Wow. So, what of profits. Good that you asked. Nokia's Symbian-based smarpthones unit reported a - get this - jump of - 64% of its profitability! YES ! This is a unit that has a hit product on its hands and no possible 'gimmick' of any kind of price wars or discounts or marketing gimmicks caused the uptick in both unit sales and average prices - if profits also grew! That is genuine desire at Nokia!

This is the smartphones unit that Nokia CEO then killed on February 11 with his moronic statements. Nokia had a genuine hit product in its smarpthones - the new Symbian S^3 version was seen as fully competitive with most operating systems out there - no, I am not saying S^3 was 'as good as the iPhone' - nobody is - but it was competitive with Android, and far better than RIM's Blackberry or Palm or Microsoft's Windows Mobile or its new Windows Phone etc. You cannot grow unit sales, AND average sales prices AND profits - unless you truly have a hit product on your hands.

This is not reversable now. The damage done by the Elop Effect is enormous. But it can be partially recovered simply by firing Elop and cancelling the stupid path from the world's most used smartphone OS (Symbian) to the smallest and least-used (Microsoft's Windows Phone 7 which even today is losing sales and has shrinked to 1% market share globally).

Lets go back to Q4 of 2010, six months ago. Nokia's smarpthone unit sold 28.3 million smartphones, it generated 4.4 Billion Euros (6.4 Billion US dollars) of sales revenues and produced a profit of 548 million Euros (795 million US dollars). Clearly the smartphone unit had a dominating position in the global smartphone market share - as I said, as big as iPhone and all Samsung smartphones added together. As an annual sales company, this Nokia Symbian smarpthone unit generated the equivalent annual sales revenues of 26 Billion dollars and profits of 3.2 Billion dollars. This unit alone would rank 374 on the Fortune Global 500 rankings by revenues and by profits would rank 155th biggest giant corporation on the planet. What stupid clueless moron CEO takes that Goose that Lays the Golden Eggs and turns that into the turkey that makes a loss!

Now, in one year this cannot recover, the damage by Elop has been so severe. But also, the Nokia smartphone design competence is enormous. The Symbian and Ovi ecosystem installed base is powerful. The carrier relationships are strong. This could be a recovery project, with a 'target' of achieving a 20% or above target using Symbian - and remember, Symbian has a migration path to MeeGo, so this is the only legacy OS that is 'futureproof'. So whoever buys the Symbian Nokia smartphones unit and its factories, sales organization etc - would also obviously - obviously - sign up for the logical migration path to the most desirable smarpthone OS out there right now, which is MeeGo. And only Symbian has a migraiton path to MeeGo (using Nokia's developer tools called Qt). The stupid move by Elop was to cancel the migration path (because that obviously did not fit with Microsoft's plans). The smart move by whoever buys Nokia's Symbian unit, is to instantly restore the migration path, and to kill all Microsoft development plans and shift them to MeeGo migration paths.

This is a restoration project. This is like Google buying loss-making Motorola. This was a VERY healthy division of Nokia, which while being only the size of the 374th biggest company if set alone, still was so profitable, it would have been the 155th most profitable company on the planet. This is a VERY healthy company, that was driven into the ditch by Elop. Fire him, cancel the Microsoft strategy, resurrect the Symbian strategy with Ovi store, Qt migration to MeeGo, and this unit can be restored to something close to the value it had six months ago. The damage is not all lost, some can be recovered by smart management now. The phones are great, the sales organization is great, the latest Anna edition of the Symbian OS is very competitive. And whoever buys this, earns instantly the world's most used smarpthone OS - twice as big as Apple or Android by installed base - and with some love and care, can restore the new smarpthone sales to at least 2nd biggest smartphone maker, possibly even back to biggest and probably by next year, back to 2nd biggest smartphone OS by new sales (Android is now too big to be caught as the biggest obviously).

What is 20% or maybe 25% of all smarpthones sold worldwide worth? Its as big as all Motorola smarpthones, plus all SonyEricsson smartphones plus all LG smartphones plus all Sharps, Fujitsus, ZTEs and Huaweis and Lenovos and Dells and HP/Palms - added together! Remember, Nokia was very healtily profitable until the Elop Effect - and in the last quarter before his outrageous statements, Nokia average sales prices surged by a Nokia record and the profits skyrocketed by 64% from the quarter before. That is a company worth owning, even if the current CEO has driven the car into the ditch and dented it a bit (Ok, caused a lot of damage, but this is not a write-off. Remember, Symbian is the only OS apart from Samsung's bada, that works on very cheap phone hardware! This is THE strategy to get into the pockets of the next billion smartphone users. Not Android and definitely not resource-hog Microsoft Windows Phone OS haha).

Look at Nokia's phone portofolio. Still today, almost a year after it was released, the Nokia N8 is still the phone with the best camera. And remember consumer surveys from the USA to Europe to Asia - even among smartphone buyers - they value the camera MORE than the apps or the operating system! Nokia is a master at cameras thanks to its long standing partnership with Carl Zeiss. And what of the E7, that was a genuine killer smartphone by many reviews (just on the eve of the Elop Effect). Or the first casualty of the Elop Effect the X7 - a smarpthone so good (this is the first with the latest Anna version of Symbian), AT&T of the USA, agreed to sell it with handset subsidies, the first time Nokia had a premium consumer phone accepted by one of the big US carriers to sell with subsidy - a decision that Nokia (Elop) cancelled from its end - because Elop wanted the Microsoft deal and didn't want AT&T.

A company that is potentially the world's biggest smartphone maker again, but certainly at least the second biggest still today, that always delivered big profits for Nokia, would be far bigger than RIM or HTC or LG or Motorola with or without Google haha. This is a big profitable part of Nokia's assets but a vastly undervalued asset now, due only to the Elop Effect. While that effect cannot be totally reversed, it can be greatly minimized and Nokia can recover with its Symbian smarpthones unit - provided they restore the migration path back to MeeGo as was the official Nokia strategy up to February 10.

As I said, Microsoft needs to buy Nokia because anyone else will cancel the Microsoft path and restore Nokia to profitable business. But Microsoft would instantly become irrelevant in mobile if they now lose their last opportunity with Microsoft Windows Phone 7 operating system. So this strategy depends on who buys Nokia. If Microsoft buys Nokia, they will kill the Symbian path as outlined here, and force the Nokia smartphone unit to shift to Microsoft Windows Phone 7 as now is the Elop strategy. For Microsoft it wouldn't matter how costly this is, and what market share they are left with in the end. I have modelled the best case scenario gives them a bottom of 6% next year and a peak of 8% at the end of 2013 by Nokia going the Microsoft way. For Microsoft even if they do half that - and only get 4% with Nokia - that is 4 times better than how they are doing now without Nokia, as Microsoft's Windows Phone is failing so badly in the market that its share dropped to 1% in Q2 of 2011, this after Microsoft's best efforts including offering phones with so enormous discounts that they were selling for one dollar in the USA for example. Microsoft is dead without Nokia in mobile.

But if anyone else gets Nokia, they do the smart thing obviously and ditch the dead-end path of Microsoft restore Nokia Symbian and its migration to MeeGo, and get something like 20% or better market share by next year to Nokia smarpthones and something back to near 25% by 2013. That Nokia smartphones crashed from 29% market share in December to 15% today - is only due to the Elop Effect, nothing else. The phones did not develop suddenly technical problems (like Antennagate) or Nokia brand poisined by Nokia oil rig spill in the Gulf of Mexico or Nokia car brakes failing like Toyota etc. Nokia is fine, it was the CEO who was the cause.

MEEGO PREMIUM SMARTPHONE UNIT

Which brings us to the hidden gem. Would you like to have the owned Motorola one month before the Razr was launched? Would you have wanted to own Apple one month before the iPhone launched? Nokia is in that very rare and privileged position now - in August - that it is weeks from the launch of the hottest phone on the planet, the N9. This phone is not based on Microsoft, it is based on the newest, best, open source (Microsoft is not open source, Apple is not open source, RIM is not open source), Linux based (Google's Android is also Linux based), touch-optimized smarpthone OS, called MeeGo, developed with Intel. And yes, only MeeGo is a new OS that has a migration path from a previous OS - and isn't it nice if the OS you have your migration path from - happens to be Symbian the one with the world's largest installed base, by far the world's biggest developer community and the world's biggest carrier coverage and the second most used app store.

The tech press has not been as wild about any phone since the iPhone. No Nokia phone ever, ever, has had as strong a positive response as the N9 had when it was unveilled some weeks ago. The phone and its revolutionary swiping operation is loved by the tech reviewers some - some US based to be clear - have even gone as far as to say this is better than the iPhone. I won't claim that. But I do dare to say, the N9 alone, with MeeGo, is the biggest hit phone Nokia has ever had in its portfolio and only a total dumbass would refuse to sell it in every market. As the N9 is a premium price phone - and Nokia is suffering from losses this past quarter, Nokia should sell the N9 absolutely everywhere. As it is manufactured in Nokia's own factories - which stand idle (generating big losses) - using Nokia standard components (for which Nokia has bulk sales commitments to get the volume discounts) every possible reason says Nokia has to sell the N9 in every market it can. But Elop says no. He refuses to sell the N9 in most of hte biggest markets like the USA or India etc, and in most of Nokia's traditionally strong smartphone markets like the UK, Germany, France, Italy etc. Idiot. The Microsoft Muppet. But this management folly is easy to reverse and its effect is immediate and total - release the N9 to sell in every market and you have a hit phone, guaranteed!

Not a fake Nokia phone like the first Microsoft Nokia design which would be made in Taiwan by Compal's factories - this is a genuine Nokia design, made in Nokia factories. Whoever buys Nokia (unless its Microsoft) would instantly reverse Elop's idiotic decision to limit the N9 sales, release it to all markets, run the factories at full shifts, and flood the world with Nokia's best superphone ever.

How could it sell? Currently, really, Elop said the N9 will only sell in 29 'countries'; including such tiny ones as Luxembourg haha. The 'big' countries like the UAE, New Zealand, Ireland, Norway etc. Countries of under 5 million population are likely to get the N9. But not France, Italy, Spain, UK, etc countries with ten times the population or more (like Germany with 80 million population and where Nokia has always been by far the bestselling smarpthone until this Spring).

Elop has further deliberately damaged N9 and MeeGo sales by saying in public that 'even if the N9 is a hit, there will not be more MeeGo based smartphones from Nokia'. What a moron. But yes, any normally intelligent CEO would launch the N9 globally immediately (it starts to sell now in September in some small countries haha, even Sweden had to remove its N9 'countdown clock' from its website so even Sweden is not now sure if they'll get the N9. Is 8 million people really too big for Elop?)

So. Lets compare. The last phone that had some buzz from Nokia was the N8 which released for Q4 of last year. Conveniently for our analysis, it also was on a new version of the OS, Symbian, and its S^3 version. How did it do? Nokia said that all S^3 sales totalled 5 million in Q4 - that was across three handsets, only the N8 sold the full quarter. It was analyzed by independent sources that the N8 sold between 3.5 and 4 million of those phones.

The N9 is a bit more expensive than the N8 but it has far more buzz now, and the overall smarpthone market has grown since Q4. So in rough terms, we should be able to see at least 3 million N9 sales in one quarter. At an average sales price of 500 dollars and multiplying that sales with four quarters, we look a MeeGo based Nokia premium smarpthones division generating sales of conservatively at least 6 Billion dollars (and it should have at least similar profitability as the Symbian phones had in Q4, so they'd make about 750 million dollars of profits (in reality much more, because remember, the Symbian profits included far older phones too, and lower cost less desirable phones on the older Symbian OS as well).

But wait. There is a second MeeGo phone ready to sell right now in August! Yes! Even though Elop refuses to sell it (Nokia is only making a small run for developers) it is called the N950, and it is roughly speaking similar to the N9 what the E7 is to the N8, the N950 is an even more premium smarpthone with a slider QWERTY keyboard. So Nokia could right now release two MeeGo based premium smartphones instantly and sell them if only the CEO allowed it. And both running the magical new MeeGo OS that many tech pundits think is the best OS (or second only to the iPhone) out there, far outclassing the Android, Blackberry, Microsoft Windows Phone, Palm, bada etc operating systems out there.

But wait - actually there is a third MeeGo handset. Elop killed a previous MeeGo based Nokia model in January, called the N9-00. And if we stretch the issue a bit, we could even sell an older Nokia model, the N900, with the new MeeGo operating system (the original N900 ran MeeGo's predecessor OS, called Maemo) but as this phone is about two years old, it could be manufactured at significantly lower costs, as a kind of 'entry level' model, similar to how Apple sells the older 3GS iPhone even as it sells the newer iPhone 4. So. I can see your MeeGo N9, and raise you four models. Four MeeGo based, genuine Nokia design premium smartphones, that run the newest and most exciting smartphone OS - MeeGo - Linux based, open source OS - that has a full migration path from Symbian!

The other three phones are definitely not as hot as the N9, but if three phones running Symbian S^3 were able to sell 5 million units in Q4 when two of them sold less than the full quarter, and now we'd have 4 phone models, then surely these 4 Nokia MeeGo smartphones should sell 5 million units per quarter. Their prices would vary from below to above the N9. So if we average the prices at 500 dollars (most of the phones sold would be the N9 model) then this company total sales would be worth 10 Billion US dollars, earn a profits of about 1.2 Billion dollars and at 20 million smarpthones sold annually, this MeeGo-only premium Nokia smarpthone unit alone, would be ranked the 8th biggest smarpthone maker! (yes, bigger than Motorola that Google just bought).

MeeGo and the N9 were the result of what Nokia could do, when given the task to leapfrog Apple iPhone to create the world's best smarpthone. We can't know how good it is, unless it is fully sold and supported by its owner, not if it is being badmouthed by the CEO. But any competent CEO - or the new owners of Nokia - would instantly release the N9 (and the three other MeeGo devices) and give them the best possible Nokia marketing support NOW. In every market. NOW. in the USA now. In the UK now. At every carrier and operator around the world - come on, China Mobile the world's biggest mobile operator - as big alone as all US carriers - doubled - has said it will priortize MeeGo! MeeGo! And Nokia is the only maker of MeeGo smarpthones today. Why not use China Mobile and make this the must-have superphone of China - while China Mobile cannot sell the current iPhone because that is incompatible with China Mobile's network technology (Nokia has provided smartphones on the China Mobile standard called TD-SCDMA for many years now).

Oh, by the way, the smart buyer of Nokia will go after Anssi Vanjoki to run this MeeGo unit as it was supposed to be, and allow all the fired/resigned MeeGo top staff to be rehired to bring the unit to its full potential, obviously.

SOME POTENTIAL BUYERS

Microsoft - sell NSN, sell dumbphones, sell Nokia brand (sell Microsoft branded smartphones, Nokia value more to Microsoft by selling it, than attempting to keep and co-brand it), sell dumbphone factories and most of the sourcing (Microsoft phones use many different chips etc) keep Navteq, keep patents, keep Nokia smarpthones, related factories, engineers and especially smartphone sales staff and carrier relations, keep Ovi store but kill Ovi brand, use Ovi as the rebranded Microsoft Windows Phone store, use the MeeGo unit to create iPhone killer (but running some future edition of Windows Phone) in the style of how Zune was supposed to kill the iPod.

Intel - sell NSN, sell dumbphones, sell short-term rights to Nokia brand for dumbphones but for example 2 year transition after which the dumbphones unit has to rebrand to something else. Keep Navteq, meep patents, Nokia Symbian smartphones, Nokia MeeGo smartphones including related factories, sales, carrier relations and Ovi store. Bring Anssi Vanjoki to run it all.

Samsung - sell NSN, sell some of the dumbphones parts including some of its factories at the low end but keep the smartphone factories and engineers and sales staff but keep probably a few factories of super efficiency and scale in desirable countries, retool those for Samsung basic phones. Sell Nokia brand to someone other than the one who bought the Nokia factories (so that Nokia will definitely go to a smaller rival brand to ensure that Samsung is world's biggest phone maker). Switch Symbian to bada, adopt MeeGo as Samsung's premium OS (shifting gradually from Android to MeeGo, now that Google is owning Motorola). Keep Navteq. Keep the patents, use it to get rid of Microsoft tax on Samsung Android phones and to get rid of Apple blocking of Samsung tablet sales in Europe. Take the Ovi store and turn it into a Samsung/bada/Meego store. Only selectively keep engineers (Samsung is very deep in fresh graduated engineers out of South Korea and many parts of Asia, cheaper and more recently graduated)

Hewlett-Packard - sell NSN, sell the dumbphones unit and Nokia brand. Keep Navteq, patents, the Symbian unit and its sales organization and factories and engineers. Sell MeeGo unit (too much overlap with Palm, all HP really needs is the sales organization and factories to become big player)

Cisco - Keep NSN, keep patents, keep Navteq, pick much of the top talent from engineers. Sell dumbphones, sell Symbian smarpthones, sell MeeGo smartphones, sell Ovi store, sell Nokia brand.

Apple - sell NSN, sell dumphones, sell Nokia brand, sell Symbian unit including engineers and sales staff, but keep its factories and switch away from Foxconn to use Apple's own (ex Nokia) smartphone factories to get more control of production and (even) more profits. Keep MeeGo unit to help build some future iPhone or split of product line but never release any visibly Nokia designs under Apple brand. Keep patents, keep Navteq, keep some of top engineers, keep Ovi store for its carrier relations and end Ovi brand obviously, adapt that to App Store.

Google - haha, this is a twist but could be sneaky.. Remember, you can buy Nokia and sell most of its parts, so its total cost is not as heavy. Sell NSN. Sell the dumbphones unit and Nokia brand. Keep the Symbian unit but migrate it to Android as Google brand, but promise all Android partners that similar to Motorola, Google will release the Nokia smartphones unit into its independent entity as soon as it has migrated to Android and has returned to profits, ie latest late 2012. Becuase this is very sensitive now, with Moto and Nokia, Google would have more smartphone capacity inhouse than its partners have, Google should almost instantly turn these two units into semi-independent units, even when still generating operating losses, for example sustained with Google-financed loans, but not to be in Google's formal control. Sell parts of Navteq that are direct competition to Google maps and Admob etc. Take the carrier billing parts of Ovi store and incorporate to Android store. Pick best brains of engineers to enhance Google's mobile mission. Use the Nokia acquistion as a kind of bargain-price headhunting task, resulting in big Google campuses in Finland and other major Nokia bases of today (Singapore, Spain etc). Adapt the Qt development tools to include Android, giving past Symbian developers and any Intel partners a natural migration option to Android in the long run. Then sell off the MeeGo unit. Obviously terminate all Microsoft work.

Sony - sell NSN, sell dumbphones, sell the Nokia brand, sell most of the smarpthones unit and most of the MeeGo unit but cull them for what best parts can enhance Sony or SonyEricsson. Keep the patents. Sell Navteq, sell Ovi, but keep some of top engineering talent. Of phones, keep essentially what were known as N-Series phones for their cameras, musicplayers etc - incorporate those engineers, designs, factories and sales - to SonyEricsson handset sales. This strategy would not make sense if SonyEricsson handset unit continued as an independent. So Sony would have to buy out Ericsson out of the SonyEricsson partnership. Even then, probably easier not to mess with all Nokia assets, just take SonyEricsson into Sony ownership and run with that (with Playstation Portable etc)

Siemens - if they have sellers' remorse, they could come back instantly via Nokia. Keep NSN. Keep Navteq. Keep Symbian based smartphones unit and MeeGo full MeeGo migration and Ovi store. Keep the smartphone factories and sales. Keep the patents. Sell the dumbphones unit and sell the Nokia brand with a time-share, where Siemens could keep Nokia branding for about two years, after which it goes 100% to the new buyer of dumbphones (while which Siemens would re-instigate the Siemens brand).

Hon Hai (ie Foxconn) - sell NSN, keep Nokia brand, keep all efficient Nokia factories, certainly all dumphone factories and most smarpthone factories. Sell Navteq, sell the Ovi store, sell the MeeGo unit, keep the patents. Turn this into Hon Hai/Foxconn's major global strategic move from being a manufacturer of other brands, to selling under its own brand but on low-cost featurephones (in style of ZTE) and low-cost and mid-price smartphones (in style of Samsung bada). Thus keep Nokia sales channels. Keep the Symbian OS to prove to Apple that Foxconn cannot be a 'serious threat' to the premium customers that Apple attracts (because Foxconn wants to continue to make iPhones etc). Sell most of the engineering, design etc as far cheaper engineers can be hired in Asia.

Dell - sell NSN, sell dumbphones, sell Nokia brand. Keep Navteq, Nokia Symbian and MeeGo smarpthones including its migration path and Ovi store and factories, engineers, sales and carrier relations. Keep patents.

ZTE - could theoretically keep most of Nokia and make use of it but lets say they were 'selective' then at least they would keep NSN and instantly leapfrog domestic rival Huawei and Ericsson to become world's biggest telecoms infrastructure provider. Keep the Nokia phone brand and use it as a premium brand but sell the dumbphones unit (ZTE has ability to sell dumbphones even more cheaply today). Sell the Symbian unit but keep the MeeGo unit and launch the N9 etc MeeGo phones as ZTE's world domination superphone play, and thus keep much of the smartphone sales staff. Sell most of the engineers and factories for handsets and probably also the Ovi store and Navteq, where ZTE's big plays would be in the scale of infra and lower cost handsets. Keep patents.

LG - Well, anything Samsung can do, LG could do too, right? Same play as Sammy, but LG could keep the Nokia dumbphone unit - and thus leapfrog Samsung to become world's biggest handset maker (and with Nokia's efficient factories etc, turn LG's phones unit into profits). Sell the Symbian unit and with it the Nokia brand but keep the MeeGo unit as LG's premium phones unit, and migrate from Android to MeeGo while riding the hot N9 and siblings to big smartphone successes. Obviously sell NSN, keep the Ovi store but rebrand for LG and keep Navteq and patents.

Any Japanese phone maker like Panasonic, Sharp, NEC, Fujitsu etc - By acquiring Nokia the Japanese player would make an instant global return to the mobile market as a major player. As typical of most Japanese, they'd probably instantly rebrand to their own brand so Nokia brand should be sold, as should NSN. I think Japanese players would see no point in fighting for ever slimmer margins in dumbphones so sell the dumbpohne unit and keep the Symbian smarpthones unit (compatible with most Japanese makers anyway who made Symbian until a few months ago) and the migration path to MeeGo and the Ovi store, patents, Navteq.

Alcatel-Lucent - Keep NSN and instantly become biggest infrastructure maker. Sell most handset stuff including dumbphones, Nokia brand, Symbian phones, Navteq and Ovi store, but keep the MeeGo unit and take the big profits of the hit N9 phone, and use that to relaunch Alcatel branded phones into many markets that the French maker has left years ago but play the smartphones only at very high end premium smartphones in style of Apple. Keep the patents.

Many many others could want some parts of Nokia: Huawei, Amazon, Oracle, HTC, Ericsson, Pantech, Lenovo, SAP, even some big operators/carriers possibly like China Mobile, Vodafone etc.

And the imaginary Management Buy-Out - And lets imagine for a moment, that some wealthy Nokia managers get together with some investment bankers and buy out Nokia. If it was thinking of what is 'best for Nokia, strongest Nokia, best for long term as pure Nokia' - then yes, NSN would have to be sold, it makes the package too expensive. The dumbphones unit will never bring as good value as today, sell it too, and the mass volume factories and related sales, but rent the Nokia brand for them for a minimal period like 18 months perhaps. Keep the Symbian smartphones unit and MeeGo unit, restore the migration path (fire Elop and end the Microsoft misadventure). Keep Ovi, Navteq and Qt development tools. Keep the patents. Thus put Nokia Corp on a severe 'diet' and immediately cut it to one third its current size, but keeping its most profitable parts and its migration path and growth into the future. Ride the N9 and MeeGo hysteria to the max. If there were some wealthy Nokia owners who maybe were looking at the drop in Nokia value and considered this scenario, now would be a high time to make their move, because if it gets into a bidding war, probably the big tech giants would have deeper pockets to end up owning Nokia.. The obvious guy to run this company would be Anssi Vanjoki again, but it might be personalities issues with the buyer group who might have their own 'leader' who would want to then run Nokia (but Anssi could also be one of the buyers haha, he's quite an affluent guy haha)

So there you have it. What is there of value in that old brand of Blue, Nokia, the company whose ringing tone is the most recognized song on the planet.. Whoever ends up buying Nokia will almost certainly not keep all of Nokia. This was a primer on what parts might be of interest to what kind of parties, and in some cases, also what kind of valuation one might give to individual units.

(Also please note, I am on summer vacation, so while I enjoy the comments here, please don't be alarmed that my responses are likely going to be very delayed during August)  

Comments

[Eurofan]

Wow! I think it's fair to say Nokia is a bigger prize than MMI, a much bigger prize.

[Peter White]

What about HTC, Huawei or a Chinese player. A hedge fund perhaps?

[peter]

Tomi, I am sure you are the right ceo to run nokia now, period.

[peter]

@Peter White, for Huawei, depends on the depth of its cash pocket, Huawei would like to own every part of nokia. NSN, all cell phones, brand, patents and talents

[rob]

Nokia as it stands is still way over valued, their patent collection is the most important prize, unfortunately it comes with a bunch of failing arms, it's like an octopus where only the brain and beak are valuable and the tentacles are worthless.

as a brand their biggest problem is lack of mindshare, they have been selling lots of phones yes, but most of those are dumb feature phones, if you think they appear innovative and futuristic then I've got a N 3310 to sell you. Phones are status symbols and you don't ask someone out wearing a potato sack and crocs.

Furthermore all of their innovative phones never see the light of day, the best thing Apple does is show you the future and then lets you buy it a month later, Nokia shows you the future and says it was just a prototype, or it won't be out for another six months or even available in your 1st world country. Apple ships devices, Nokia is all smoke and mirrors showing off Concept Cars at an Autoshow that you can never purchase.

The MSft bid really makes a lot of sense, a 90's Computer Company buying a 90's Mobile Company, yawn...
at least if MSft buys Nokia you can play Snake and Minesweeper on the same device!

otherwise China's Baidu might make a play

[SoVatar]

Another suitor would be Oracle. With their Sun acquisition they went into hardware, have nothing in mobile at all. Sure, they currently are not a consumer oriented company, but they are very aggressive and really good in integrating the companies they buy. They could create a consumer division around handsets.

And there is the Nokia option: Fire the board, fire Elop, and start again to deliver great phones consumers want to buy. Too late?

[Eurofan]

Wow, the Nokia option. Nice. Probably would take a general strike by all Nokia employees in Finland, walk off the job for three weeks without union vote, just a mass "screw this" protest. I think that might do it. Even fat cat Ollila must have a conscious or at least some shame under that lizard Bildergerger skin. The rest of the Board, I think they are like cockroaches afraid of the light. Once the Board quits there is a new vote by stockholders for a new Board which will pick a new management. This could be tech industrial history in the making perfect for the twitter age, kind of like Cairo or Athens?

[KPOM]

Nokia would be a huge prize for many reasons, and I think any of the companies you mention might consider an acquisition. Apple would be the most interesting to me, since it would mark a change in Apple's philosophy from outsourcing production to controlling it. Tim Cook is a master of supply chain management, though.

Another possibility is a defensive merger of equals between RIM and Nokia. RIM's days as an independent company are numbered, too. Right now, it looks like the future belongs to Android with Apple occupying its historical premium niche. Something needs to emerge as the third major OS (likely the #2 OS to Android), and perhaps RIM management might see a future with Nokia's factories and patents.

[eduardo]

Nice post.

Tomi, can you hazzard a guess as to when Nokia will be bought? Maybe a range of dates. Or a conditional prediction (i.e. when the stock price goes below __)

In any case, it does seem inevitable.

[Earendil Star]

Tomi, first of all happy holidays!

I am afraid you are forgetting the TH Elop effect here. Nokia is already owned by MS. No need to pay for something you already control.TH Elop has already given MS what it wanted for free.

Unless an unlikely hostile bid is arranged by somebody else (more as a tactical move to disturb MS actions), it will be TH Elop himself who will sell Nokia pieces before offering everything to MS on a silver plate...

And Nokia's main shareholders must have agreed on this course of action all along (maybe at the promise of some good offer in Nokia vs MS share exchange terms).

It is now only small Nokia shareholders who could react by pursuing an action against Nokia, with uncertain result...

Life is tough in the wild...

And as for the Elop effect, nice term, as long as you recognize his actions are not haphazard but directed from Redmond. Under this perspective, he is doing exactly what he was supposed to do, and rather well actually.

Finally Meego: it won't be sold because MS has no interest in that. Its technology will be incorporated in WP in an attempt to make it appeal to potential buyers, as opposed to the current WP total Elop.

[Eurofan]

@Earendil Star: I'm still laughing at what we have here, "the current WP total Elop." That is priceless, a WP total Elop. Like a shit sandwich. Just classic. Oh, I'm sorry, did the grumpy Barron just give a loud harrumph from his gentleman's club? Some thing about hard to fire soft spoken Finnish engineers being hard to fire? I'm sorry, best to let the Barron finnish off his afternoon brandy and cigar and let him have a good brunch before we follow up on his surly mood. But the Barron and I agree on a price 14 months from now when Nokia's valuation is 12B $US. That price will be...25B $US, a hundred percent markup. Because despite the Barron's discomfort with the idea he is a realistic man and he and I know fat, woody, did the Baron say Lazy?, uncool Nokia with its half finished OSes is actually a very good bargain at $25 B US even after four more quarters of losses. But who will pay that price, which Prince will kiss the frog or which ugly frog will kiss the Princess. I shouldn't have touched the brandy before writing this. I need a smoke and a walk.

What we have here is a WP total Elop. Classic.

[teklemon]

I dont think Nokia will be sold in near future.

But a possible scenario would be to clean up the Nokia group first and make it more salable.
Prerequisites:

1. NSN - break it up and sell it off to multiple parties. The network systems which is profitable and leading in 4G/LTE/MS will have many takers. Ex: Cisco, Samsung networks, Siemens or even IBM. The software side is high margin business but relatively less profitable due to efficiency issues, but if split up and packaged well it could be sold as a whole or in parts to houses like Oracle, Accenture, HP, IBM, Atos, Wipro.....NSN has to separated from Nokia in any case.

2. Nokia - First of all, a complete re-branding required. Comon, the marketing is the worst part of Nokia, they dont even change its logo. Young people need that hip feeling about a brand..its a consumer brand not an investment bank to keep the same logo/colour over decades. Just an example, many people would like to show-off what phones they carry in Fecebook/Twitter etc. If you tweet from iPhone/Android , the tweet shows 'from twitter for iPhone/Blackberry/Android/HTCSense" etc. But if you buy the latest Nokia phone by spending 100s of $ and tweet, it just shows "tweeted from ". Comon Nokia marketing, wake up. Simple things/changes will do wonders to the brand and reinvigorate. The market has changed they dont care about tradition, but only whats cool.
After all the preparatory work, if a sale is still required, the best suitor would be MSFT. I dont see any issues in keeping Nokia brand, it can just add a tag below " A Microsoft company".

3. NAVTEQ - agree with T

One thing is sure, Meego has no future with Nokia. Right or wrong, Mr Elop has killed it completely. Now only if the remaining partners could put it back into the orbit, then over time it could be big again. But any strategy now to go back to Meego and start from scratch (that is, to build a world around it) would be absolute foolishness.
So the best option for Intel or whoever is still pursuing Meego is to join with the Ubuntu Linux group and make it their offering for the Smartphone OS world. Ubuntu is yet to enter that space and I believe if they rebrand Meego as Ubuntu Smartphone OS, it might fly. It could be the first "real" open source smart phone OS.

[Gretchen Baenre]

Sorry, but Nokia, patents and all, has become a souring turd. There is absolutely no two ways about it.

[meegy]

>
I need one atleast plz

[meegy]

>>>> fully launch a series of 4 MeeGo based Nokia smartphones now in 2011 and many more in 2012.
>>>>
I need atleast one for me . PLZ

[Resim]

Uhh this is very long. I am readed and sore my eyes.. Thanks you.

[john ramirer]

it is funny, you said "...to the smallest and least-used (Microsoft's Windows Phone 7 which even today is losing sales and has shrinked to 1% market share globally)".
How about Meego's market share? You say that WP7 is the wrong path because it doesn't have market share, but how Meego can be better? I think Elop saved Nokia, it was a tough decision but the right one - go away from the crap Symbian and be more like Apple, releasing less phones but a better environment and with a more user friendly OS.

[@rodrigottr]

Anyone who wants to make a huge strike against Apple and Android could be thinking on buying Nokia.

And I totally agree with Tomi about Intel to be the one who most beneffits from buying Nokia. By buying Nokia Intel would simply buy for itself most of the necessary skills to be in the game without depending of software partners, something I've been observing would interest Intel as its relations with Microsoft and Apple are not good.

Those skills are: a worlwide (except for US) powerfull brand, a worldwide selers chain, a top class of designers, a top class of hardware engineers, and the necessary (not the best) software skills to never need again Apple's or Microsoft's products to sell any chip Intel intends to sellnplus giving Microsoft the strike they always dreamed to give.

But that would be a acquisition to perform a insanely deep change on Intel's strategy. That would be a all win bet capable of changing everything and also of ruining everything for Intel.

That is why I'm not so sure they have the guts for that. Until now Intel don't seems to me to be audacious enough for such move. But I'm sure if they did that move, that would be the best move they ever did.

[Stephen Elop]

Gee Tomi, I don't know at what price you bought your NOK shares, but I feel that you are hurting. I too have a significant part of my portfolio in NOK but bought them at $7 and lower. You seem to place all the blame on Elop. You give him too much power. The decision was not his alone and since you are not part of the Board, how could possibly have a clue as to how they arrived at this decision? Will you print a retraction on this Blog in the future when Nokia will complete another of its many transformations, like it has had to do in its 100 + years of history? But if they are sold, I will surely make a profit, so it's win-win.

[@rodrigottr]

@Baron95

Acording to the world's largest brand consulting Interbrand Nokia was the 5th most valuable brand in the world in 2009. And even losing 15% of its value, in 2010, it was in 8th nine positions above Apple (17th) and eleven above Samsung (19th), the companys who have outsold Nokia's smartphones this year.

You must be out of your mind if you believe one of the top 10 most valuable brand from last year isn't a worldwide porwerful brand.

http://www.interbrand.com/en/best-global-brands/best-global-brands-2008/best-global-brands-2010.aspx

And read again. I didn't said they have the top class of SW engineers but that Nokia haves the necessary SW skills to make possible for Intel making their own tablets and smartphones if they want.