Its Now Official, Nokia Shareholders Approved the Deal

So its over. Nokia shareholder meeting today approved the sale of Nokia's handset business to Microsoft. Congrats Microsoft for picking up Nokia's huge handset business at a bargain price. It is a poisoned chalice however, as under Microsoft ownership, the smartphone business will never turn into anything worth keeping at Microsoft. The Lumia/Windows Phone business unit will at some point be closed down at Microsoft after enough money is thrown into that endless pit...

A few quick notes from the shareholder meeting (I was not present, I only monitored news via YLE and Helsingin Sanomat). Chairman Siilasmaa admitted that yes, there had been offers from other potential buyers when they negotiated with Microsoft (who told you so?). And they revealed that Nokia's royalty per Lumia handset was 10 US dollars. And that Microsoft was paying now 20 dollars per handset of marketing expenses (on top of Nokia's millions) to support the handsets (that still were selling at severe losses every quarter).

Ok, its about time to close the episode in our lives that was called 'my first phone' haha.. Bye-bye Nokia, we will sorely miss you in handsets. My requiem to Nokia is here. And we wish the newer, slimmer, to be dropped from Fortune Global 500 next year, Nokia very much good fortune on its ways to new opportunities.

I will soon release my book on the Elop Effect, it needs to be recorded for history as the biggest management failure of any global market leader in economic history of humankind.

Comments

[vladkr]

@Baron95:
"It looks like 99.7% - (...) - of the owners of Nokia (shareholders) completely ignored Tomi's rant and recommendation to vote against the deal, and were very happy to approve the Balmer/Elop deal."

Anyone with an IQ at least slightly higher than a mussel's could guess this vote was a dead end, that in fact there was no choice. In any way, Nokia would have been sold or given to MS, whatever the result of the vote would have been. Here is what has been voted :

- (YES) : Nokia is sold to MS, we give you dividends with the money freshly earned
- (NO) : We'll find a way to sell Nokia to MS without your approbation, and you won't get any money.

So, of course, it's normal 99.something voted their approbation to the deal.

P.S. As you consider yourself as a specialist, please, don't be ridiculous, and don't mix up OS and UI.

[Timo M]

Was that 99+ % not the share of shares, instead of number of people who voted for the deal? 5000 people were present at the event, but the people who were there or had voted beforehand held 1.7B stocks and of those 1.7B almost 100 % were for the sale? That would make 99.7% sense to me. Someone could have 1B Nokia stocks and voted "yes", since they have not cost much anything lately. That quickly jumps to close 100 %.

I was fully for the sale, being a Nokia owner now, but if someone would have offered a better price... No better offer came at the meeting and it is done now. Bye Nokia phones! I still remember the hot phonecalls I did with my now Mrs. Timo M with my Nokia Mobira Cityman 100. Literally my ear was on fire after 20 minutes. Oh the things you endure for love. Those old NMT phones had transimtters with the power of a freight train.

Tomi: please destroy Elop with your book.

[Pekka Perkeles]

"And Symbian was never a "smartphone" by the currently accepted user experience. If you give an average Joe today a 2008 iPhone he will immediately recognize it as a smartphone. If you give him a 2008 Symbian he would not call it a smartphone."

How true indeed.

[vladkr]

"And Symbian was never a "smartphone" by the currently accepted user experience. If you give an average Joe today a 2008 iPhone he will immediately recognize it as a smartphone. If you give him a 2008 Symbian he would not call it a smartphone."

How true indeed.

----

And what about Maemo ?

[dontbeagirl]

Will the book have the same fake charts as this blog?

Please people google "dominies communicate" blog and judge yourself which one to believe.

[WonTheLottery]

@baron95
"And Symbian was never a "smartphone" by the currently accepted user experience. If you give an average Joe today a 2008 iPhone he will immediately recognize it as a smartphone. If you give him a 2008 Symbian he would not call it a smartphone."

The 2013 iPhone is still not a genuine smartphone. You can redefine smartphone to mean a functionally limited, dumbed down, media consumption device trapped in a nursery of content where daddy Apple decides what's appropriate for you but that will never make them smart, quite the contrary.

It's no wonder Android has completely eaten up the market, it currently has no real competition whatsoever.

@baron95
"All is going exactly according to plan and exactly as I predicted."

Huh? You predicted Windows Phone would be a success for Nokia. In reality Nokia has ended up virtually worthless and pwned by Microsoft just as people who knew what they were talking about predicted. Your attempts to rewrite history are as laughable as your 'analysis'.

@baron95
"Windows is solidly the third ecosystem. Bada is dead."

Bada outsold Windows Phone up until Samsung discontinued it. Yet another hollow boast.

@baron95
"All hail Europe and Jolla. Sailfish for the win. They have sold out the pre-order phones. All FOUR HUNDRED AND FIFTY of them. :)"

Jolla is a start-up company of just 80 employees, it's interesting you and LeeBase seek to compare them to Microsoft. It certainly appears Sailfish OS will be considerably better than any smartphone OS currently available but that alone is no guarantee of success.

Anyhow, all hail Samsung and South Korea, they did a magnificent job of exploiting the void Elop created.

[jj]

Nokia's Windows Phone strategy didn't work at all. I will be interested to see how Microsoft will change it. Just bigger bunch of money isn't enough to make it work.

[Bruno]

that baron guy is such a funny little 'murican troll. so amusing.

it's going to be interesting how will MS boost lumia sales. I mean, nobody wanted those phone in the first place (WP market share is almost android market share statistical error), and I don't know why would one want those phones in the future?

[Asko]

Just in from Finish YLE: Nokia HQ will be moving from Keilaranta to Karaportti where NSN has its HQ. Microsoft will be moving to ex Nokia HQ building at Keilaranta. This deal starts to feel very real.

[WonTheLottery]

@baron95
"I am on record, early, consistently and forever, even before the WP announcement, that Nokia was going down in flames, and WP was simply a less disastrous option that continuing with Symbian/Meego."

WP was the most disastrous option Nokia could ever have chosen and their failure was only inevitable from that moment not before.

Nokia's volume of smart devices grew 48% in 2010, their revenues grew 17%. If Nokia had stuck with MeeGo+Symbian+Meltemi+Qt they would still be playing in the major league with Samsung instead of selling off Elop's carnage for peanuts. If Android was really the great threat they could have adopted that too.

The idea Symbian users were thinking "If only Symbian were slower, bloated, less power-efficient and froze alot I'd really like it" is simply foolish but that's what it was like moving from Symbian to early iterations of Android. Sure Android has moved on since but so would have Symbian and more significantly MeeGo.

@baron95
"Ask 1,000 people on the the street and all 1,000 will disagree with you. I guess that is when psychologists start assigning codes to your your condition."
There are parts of America where I could tell 1,000 natives I believed in evolution and they would disagree with me. I'm not sure what I'm supposed to read into other people's ignorance.

Do you spend a lot of time with your psychologist?

[Baron 95]

@Won

"You predicted Windows Phone would be a success for Nokia."

I never did any such thing. I have been on record forever, saying that Nokia (and also RIM, DoCoMo OEMs) were disrupted and doomed - no matter what they did. They could never, ever keep up win Apple, Google, Samsung.

I am on record, early, consistently and forever, even before the WP announcement, that Nokia was going down in flames, and WP was simply a less disastrous option that continuing with Symbian/Meego.

Try to get your facts straight here. Nokia's temporary success (and Ericssons, and Siemen's) was all an GSM-ETSI cartel induced bubble. I am a broken record saying this. Forever.

"The 2013 iPhone is still not a genuine smartphone."

Ask 1,000 people on the the street and all 1,000 will disagree with you. I guess that is when psychologists start assigning codes to your your condition. Look it up. It is a well known pathology.

[Earendil Star]

It is Amazing to see what MS is getting out of this deal. Among the other things: right to use the Nokia brand for 10 years (the Nokia brand is the real and only driver behind the Lumia sales), the lease on the iconic Espoo Headquarters. Slowly more details will emerge, witnessing how incredibly unbalanced this whole farcical deal was in favour of the mafioso shark. MS managed to grab Nokia for peanuts, after sabotaging it from the inside with THTRH Flop, and the silent acquiescence of the board.

Quick tidbit on the absurd Nokia fire sale: MS bought Skype (?!?) for 8.5 bln $ vs 7.2 having been paid for Nokia. What a laugh!
Clearly MS had no mole on Skype's board or management when they were negotiating the deal...

[Sander van der Wal]

Ballmer's plan, to buy Nokia on the cheap was so brilliant that he lost his job as the CEO of Microsoft.

Isn't that amazing. On the one hand we have a CEO, Elop, who is apparently capable of destroying an entiere company, in close contact with the CEO of The Evil Empire.

While on the other hand, the CEO of That Evil Empire, lost his job.

How can this be a cunning plan, if it costs Ballmer his job?

[Seurahepo]

@WonTheLottery

"Nokia's volume of smart devices grew 48% in 2010, their revenues grew 17%."

You could say the *exactly* same thing about RIM.[1][2][3] And look where they are now. Focusing on unit volume and revenue and forgetting about profitability, desirability, ecosystem and developer story—as Tomi and you seem to do—does not give the correct picture about the market.

[1] http://i.bnet.com/blogs/rim-blackberry-units-over-time.jpg
[2] http://4.bp.blogspot.com/-q3iGEaGIMeg/Tfr_Z2EoeRI/AAAAAAAAAZQ/Jcp-J0UhNJY/s1600/RIM+quarterly+revenue.gif
[3] http://mobileopportunity.blogspot.fi/2011/06/whats-next-for-rim.html

"If Nokia had stuck with MeeGo+Symbian+Meltemi+Qt they would still be playing in the major league with Samsung"

That is what many people want to believe, I've yet to see the reasoning why that would have been the winning strategy. Symbian is very much alike BlackBerry OS, MeeGo was conceptually very alike BB10. RIM did not pull it of. I don't comment Meltemi as I have not seen it.

The fact is that Q4/2010, just a month after Elop came onboard. Android overtook Symbian in shipment volume, they offered similar UX half the price and with a more vibrant app ecosystem. Symbian was a done deal before Elop took the reins.

At the same time MeeGo project was delayed and had not produced anything shippable.

Both of these failures were done pre-Elop, yes the shit really hit the fan while Elop was the CEO, but you cannot turn the direction in few months.

"If Android was really the great threat they could have adopted that too."

Nokia saw Apple take their prestige, devlopers and high-end margins away. Android came from low end and took their mid-end margins away.

Manufacturing Android phones seems not to be a very good business to anyone but Samsung. Nokia could easily have seen HTC's or Motorola's fate on that path. But really, no one knows how that would have panned out.

[AtTheBottomOfTheHilton]

@Seurahepo

"That is what many people want to believe, I've yet to see the reasoning why that would have been the winning strategy. Symbian is very much alike BlackBerry OS, MeeGo was conceptually very alike BB10. RIM did not pull it of. I don't comment Meltemi as I have not seen it."

What are you talking about. Blackberry still exist today and Nokia phone division as we knew it does not. How on earth can you insist that the Windows Phone subversion was better than Blackberry sticking to their own solutions. Being bought up as a company = you lose.

[Seurahepo]

@AtTheBottomOfTheHilton

What am I talking about? The current miserable state of Blackberry. You should perhaps give it a peek before saying something that you'll regret. :)

Nokia phone division exists today, exactly as we knew it 6 months from now, the owner of that division has changed. Also Blackberry agreed to be sold, but the deal seems to have fallen thru. It does not make the situation of Blackberry any better, I could easily argue the opposite, as the stock market did.

The main point I was trying to make was: both Nokia handsets and Blackberry increased their unit sales and revenue 2010. Even so, both were in a very bad position because they had become obsolete from UX and ecosystem perspective. Even Blackberry could be seen growing by units on a growth market, and BB also grew their market with new geographies and pricepoints. It did not last and it ate away their profits.

Today we are seeing the outcome. They both are making losses, spending their cash reserves. Looking at unit sales and revenue alone, does not give the clear picture of their market position, there are many other factors to consider, which for some reason fail to be discussed in this blog. Tomi focuses on unit sales and unit share (of an imaginary "smartphones" category).

The strategy Blackberry took was very similar to the Symbian/Meego strategy many here are saying Nokia should have taken and that it would have been a winner. I doubt that.

[Baron 95]

@TheBotomoftheHilton

Nokia found a buyer for $7.2B.

Blackberry try to find partner for a $4.2B buyout and found no takers.

So Nokia's mobile division is valued at way over twice the value of BB, when in 2010 RIM was valued much higher than Nokia.

So BB wen from being worth much more than Nokia D&S when Elop took over to being worth less than half (with no takers) in the 3 years Elop ran Nokia.

What other evidence do you need that going with the in-house evolution doesn't work? RIM did everything Tomi thought was great. Nice in house transition from BB7 to BB7, HW keyboard and full screen, Enterprise and Consumer focus, messaging (BBM) focus, etc.

And they went from being worth more than Nokia to being worth less than one Nokia Division under Elop.

That is why ALL THREE RIM CEOs were fired and Elop is taking over Microsofts largest division and is a runner for CEO of the entire company.

Geez.

People here run on emotion and hatred instead of facts.

Go figure.

[ashok pai]

@ThisisBad,
"After all, a sole country is now in control of basically every Phone Operating systems. This can't be missed as a strategic advantage."
perfectly summarized. not many in the media seem to drive home this point. in the wake of the NSa mess we are seeing, the signs are ominous.

[Earendil Star]

MS astroturfers continue in their disinformation campaign. So let's clarify a couple of things.

Baldmer. Was he ousted because of the Nokia fiasco? Partly. He was ousted because his tenure is now a decade long and he is no Steve Jobs. MS needs fresh air. Plus Windows 8 is a fiasco. And because WP is a (P)OS, and failed in allowing MS to accomplish its strategy in mobile. Which (as I repeated time and again) was not to reduce Nokia to a 3% market share player, but to migrate its 30% market share to WP, while reducing Nokia to a zero margin captive OEM. Sadly (for MS), a bit because of THTRH Flop, a bit because MS was too greedy and ordered to annihilate the previous Nokia ecosystem, while WP was a (P)OS, this strategy failed and led to the current fiasco. So, there is no inconsistency between Baldmer being fired and what I posted before. Still, MS' looting of all Nokia's worthy bits is nothing short of criminal, given the way it was achieved. Not buying it at a fair price, but resorting to moles & more.

Nokia's sale. Nokia's board found a buyer in 2010, when they named THTRH Flop (the Mr Nobody in mobile) as Nokia CEO. The latest sale for peanuts is just the last act of this strategy. Nokia could have been sold for much more (which was openly declared by some parties) were it not for the fact that MS had already acquired it in 2010 and THTRH Flop was ordered not to sell it to anybody else.

As for Blackberry, comparing a mono product firm to Nokia (the universal market leader easily beating Samsung for more than a decade before it got its first American CEO) is just part of the usual MS propaganda.

[Seurahepo]

@Earendil Star

I find it very funny that you keep repeating your astroturfer mantra when you see comments you don't agree with and you cannot think of any valid arguments.

I have no connection to Microsoft. I actually don't like most of their products. On the other hand I did work for Nokia and closely with Nokia several years from mid 00s onward. I saw each and every Symbian product during those years and am quite aware what the UX and product quality were compared to competition.

I find comparing Symbian to BB OS very valid. Both were old codebases, optimised for very small hardware specs and keyboard-based, non-direct UI. Both were largely targeted for businesses and failed the transition to touch UI, modern hardware and modern apps. Not surprisingly so.

Let me repeat, even by Tomi's favorite metric, unit volume, Symbian started losing to Android just few months after Elop joined the company. At that point Nokia's products and pipeline were 100% OPK's legacy. With other metrics, like profit share, developer interest, ARPU or customer satisfaction the gap to Andoid and iOS was even greater.

Yes, Nokia beat Samsung for years until Samsung got an OS and ecosystem that was competitive. And had Apple to emulate instead of Nokia and Blackberry. Nationality of Nokia CEO had nothing to do with it. Ollila (Finn) was the chairman of the board when Elop was hired. Ollila and Kallasvuo (another Finn) were CEO when the biggest mistakes with the software strategy were made.

In the years before the iPhone disruption Nokia seemed to be quite content following the market trends. Be it flip phones or thin phones, Nokia was never first but with their manufacturing expertise could react quickly enough. But when the change was more profound and mostly about software they were unable to follow well and fast enough. Recent comments by Ollila and Kallasvuo point to hlthis direction too.