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« My Thoughts On Nokia Handset Unit Sales to Microsoft - In Short: Is Bad WAY to Sell Something and thus gets you bad bargain | Main | Nokia Under Elop - His 3 Years: Performance Review - Worst CEO of All Time - All the Facts - In Pictures »

November 08, 2013




The problem with US car manufacturers had nothing to do with an alleged ballast of 10000 unionized workers or unsellable plants.

The problem was ugly, gas-guzzling, shoddily designed and unreliable cars -- that did not sell.

Counter-example: German manufacturers do have 10000s of highly unionized workers, and manufacturing plants. Despite all the stupid things German management did (e.g. Daimler-Benz), they have not had to fire 10000 people in one day or sell plants. Because their cars sell.

When times are hard, German manufacturers adjust in two ways:
1) Kurzarbeit;
2) cancel contracts with interim workers (yes, it is easy to fire people in Europe -- large corporation rely _a lot_ upon body shopping for interim, non-permanent, easy to fire workers. Apparently you do not know about the reality of the labour market in Europe).

As for Hon Hai firing 10000 people in one day: I already explained in detail that this assembly work interests no large manufacturer. Apple and others concentrate on owning/controlling the _production_ of essential components and subparts, with highly automated lines. Besides, the ability to hire and fire 10000 people in one day goes hand in hand with 70% rejection rates at QA -- there is no free lunch.


" Besides, the ability to hire and fire 10000 people in one day goes hand in hand with 70% rejection rates at QA -- there is no free lunch."

There is a good reason German companies are good at selling expensive high quality machinery (to China!): They have a very highly trained and loyal workforce.

When you fire half your experienced people this year, you will get inexperienced people back next year.


@Baron95: "Really? They are effective? You got that by looking at it? Wow!!!" - I'm just smiling, you know. All that sentence meant I do not speak about Nokia's factories without knowing what I'm talking about. Nothing more, nothing less...

I was there and what I saw was really, really impressive. Of course, it means nothing but let it be enough that director of the factory knew what he was talking about. I have a picture about how long it took to satisfy incoming demands including responding to any changes it requires in production. You would be surprised I bet...

"You have no clue what you are talking about. Hon Hai can increase/decrease workforce by tens of thousands virtually at will. Low performing people don't last even a day there. The level of productivity/competition on a Hon Hai factory vs the one in Finland is not even on the same plane."

Are you aware of the fact Nokia has factories all around the world (Mexico, Brazil, Hungary, India, Vietnam, etc)? Flexibility, productivity and costs were not really the issues there. Finland was always special, concentrating on high value products and some research things...

Not to mention what requires you changing your "workforce by tens of thousands virtually at will"? Planning, forecasting, eh? :-)

Of course, Hon Hais have their advantage - mainly concentration of factories producing 'everything' nearby-, no doubt about that but it just simply should not be the ultimate target of all the rest of the world to move all production into China/Asia.

They are not so cheap any more and that highly evaluated 'flexibility' will not last long. People are not animals and they can not be treated like that (no rights, horrible work and housing conditions) so long, I believe. We all have read stories about what happens there...

I know you see everything with eye of an investor - but world is just more complex than that...

"You are just being emotional." - fully admitted. But I do not care... :-)


@Baron95: "That is a 17% decline. So a 17% decline over 3 years in share price (the only thing that matters) on a company that got completely disrupted is a bad result how?!!???"

Just to be objective - how big portion of current share price was recovered after announcement end of this beautiful journey with Microsoft?


@Baron95: "10,000 un-needed unionized or European workers are a boat anchor" - just a hint: please, refine your granularity and open your eyes...

Talking about France-Germany-Finland-Sweden or Poland-Hungary-Romania-Bulgaria as one Europe (from this aspect) - even though all of them are part of EU(!) - is not the same thing. Not to mention Brazil-India-Vietnam...

I have to think you are a typical US guy who has really limited knowledge about the rest of the world...


"how big portion of current share price was recovered after announcement end of this beautiful journey with Microsoft?"

Just before September, Nokia traded around 4 euros

(select the YTD option in the graphic)


@Winter: I know I own them... :-)

It was rather a poetical question, you know. Not to mention a 47% daily increase here and there...


"It was rather a poetical question, you know."

I am sorry you own them. But I am a sucker for rhetorical questions.


@Winter: "I am sorry you own them" - why to be so? It was not a bad investment at all... :-)


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B a r o n 9 5

@Zutlor "Just to be objective - how big portion of current share price was recovered after announcement end of this beautiful journey with Microsoft?"

That was part of Elop's strategy. If they had gone with Android or Meego and failed, there would be no Microsoft to buy.

The Windows Phone strategy had a plan B backstop.

You can't have it both ways. You can't claim that Elop wanted all alone to sell Nokia D&S to Microsoft and not give him credit for the sale.


@Baron95: "You can't claim that Elop wanted all alone to sell Nokia D&S to Microsoft and not give him credit for the sale."

I do not give him any credit. He wrecked Nokia by purpose - my opinion - and now it will (most probably) be sold to Microsoft. Shame on him - and on all who let him doing it. On the other hand I admit he did it professionally but that's all.

"If they had gone with Android or Meego and failed" - why on Earth it was destined to be failed? Samsung did it - just like Nokia could have done it, too...

venus Factor

This site really has all the information and facts I needed concerning this subject and didn't know who to ask.


" If they had gone with Android or Meego and failed" - aaa, that makes me really angry. The mantra 'Nokia could not do that bu Sammy yes thay can"...

Nokia had money, scale, reach, factories, operator relationships, know-how, people, the brand - everything needed to sell high quality, full range, popular products on top of a popular OS/ecosystem (Android). just like Samsung do.

At maximum they would not leverage all benefits of their mapping solution. Then so what (compared to current situation)?! Samsung has no mapping solution either and still, they are quite fine...

If Nokia went Android they would go head-on-head with Samsung...

B a r o n 9 5

@Zlutor Really?

Nokia had in house capacity to produce 4" retina-quality capacity displays or had locked in suppliers like Apple had done?

No. It had none.

Nokia had access to Qualcomm converged chipsets that were a necessity to play the GSM/CDMA markets?

No. It was in a dispute with Qualcomm that forced it to use substandard chips and had no credible way to offer CDMA solutions in the US, Japan, Korea and a few other markets.

Did Nokia had ANY presence in the top two smartphone markets - USA and Japan - like Samsung?

No. None. ZERO in Japan. Near zero in the US.

Did Nokia produce PCs like Samsung and Apple?

Did Nokia have the massive flash memory production capacity or had cornered supplies by massive upfront investments like Apple?

Did Nokia have ANY experience with their own (ARM based) application processor designs like Apple and Samsung had?

Nokia had so many handicaps vs Samsung, it was not even on the same level. It had no chance to compete with Samsung. Least of it, by the time Elop came in. Apple and Samsung had massive supplies locked in, 2 generations of designs locked in and multiple operator volume agreements coming on-line. All those were put in place way before Elop took over Nokia.

What happened to Nokia in 2011/2012 was sown in 2009. Not Post Elop.

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@Baron: yes, really. All I say Nokia had/has factories being capable of producing devices like hell, responding to any incoming demand quickly and effectively. That's is a fact...

Nokia is still capable of producing phones in volume (#1/#2 by volume, smart+dumb phones together) - head-on-head with Samsung. Including phones based on so advanced Qualcomm chips, too. othing prevents them producing in the same volume loading Android to these devices at the end...

Why on earth should they produce high-quality screens, flash memories, PCs and CPUs by themselves? That's why specialization exists, no? Do you really think any component vendor would say no to #1-#2 manufacturer? I do not think so. Samsung was/is one ef the bigges component provider for Nokia. They have respectful relationship lasting decades. They did not want to kill each other but compete fairly.

Little different approach from some fruit sticked (sometimes) patent-trolling company. :-)

Having (almost) no presence in US and Japan has nothing to do with manufacturing capabilities - they are/were special markets with special rules that Nokia did not wanted/were able to take...

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