Before I begin, I have to profess that I am no expert on Nokia. I have an interest in mobile phone technology, but that is mainly focused on Apple products. I follow the ups & downs of Nokia generally, but only as much as I follow news on the likes of Samsung, Motorola, etc. But having this interest in tech, & being a recent resident of Finland - home of Nokia - means that the recent news of part of Nokia being sold to Microsoft means something more. So I awoke this morning & my Twitter feed was full of news & views of the sale of, what is essentially, the mobile phone arm of Nokia to Microsoft. Microsoft have purchased the tech, infrastructure etc from Nokia & have 10 year licensing deals in place for use of Nokia's patents & Nokia's brand & names, as well as the HERE mapping system (totaling approx 7.1b USD or 4.6b GBP). As I read through the tweets & Facebook comments, a few things became apparent....
To me it seems a good deal for all involved. Nokia, until recently, hasn't been making relevant mobile phones for many years. They've been poorly run & have always been playing catch-up in the smartphone market. They've been out-paced & out-thought by the likes of Apple, Samsung etc at pretty much every step. The recent Lumia range has seen an improvement, but they're in a position where they may never catch up in time to cover the years of loss-making from the mobile phone arm of the business. This deal sees Nokia get a decent amount of cash to invest elsewhere where they can make money. It also takes the loss-making phone arm from their books.
As for Microsoft, if they effectively utilise what they've bought, they can make a lot of money. A focused product range (i.e. some core models across key price points & not just trying to cater to EVERY market out there as Nokia did) & some real innovation could see them really make some moves in the smartphone world.
The most interesting part of the deal top me is that Microsoft have also been very clever in licensing the patents & brand for 10 years & then having the option to buy them indefinitely. Nokia is still valuable as a brand, but should Microsoft not be able to leverage that, or just decide to re-brand, they can just pay for the patents & leave the brand. That would potentially mean Nokia would again own their phone brands but have no tech to actually make the phones, & that could lead to the end of Nokia phones altogether. Hopefully that won't happen, but I think it's obviously something Microsoft have thought about when they've brokered this deal.
Nokia in Finland.
I always knew Nokia was still at least fairly popular in Finland, but didn't realise quite how much until I moved here. I don't know the specific stats here, but from general perception it would seem that the majority of phones you see on the streets of Helsinki as still Nokia's - a contrast to the likes of the UK, where Nokia's aren't all that popular any more & the likes of Apple & Samsung rule. Finns are proud of anything Finnish & have a real loyalty towards Finnish companies & products. This has lead to some interesting comments & thoughts today.....
I've seen some Finns stating that will now no longer buy Nokia phones. They won't buy a product because it's now no longer 'Finnish'. I'm not sure what baffles me more - the fact a massive number of people buy a product from a company solely due to the fact of where it's from, or that people will now do the opposite & not buy a product because the company has changed hands to a 'foreign' country.
As an advocate & big user of tech & smartphones, & how they can improve our daily lives, I'm shocked that so many people blindly buy a product that may not be the best one for them just because of where it's from, & also that some people will now give up the perfect device for them based on the same reasoning. I understand the need/want to support local businesses, but to do so to such extremes is also detrimental to the economy. Finland prides itself on being a very 'techy' country - lots of startups, good funding, a good infrastructure, etc - but it's also a very stifled & non-competitive country - & this reaches across many industries, from tech to logistics to food/groceries. Buying local helps those companies in the short-term, but leads to stagnation when it comes to competition, innovating, driving prices down & actually getting what's best for the consumer.
Microsoft - They're now a legitimate player in the smartphone industry. They have everything they need to push on & make some great products. Let's hope they can so that they force all the other smartphone makers to continue to push the boundaries.
Nokia - They've shifted a big money-losing weight off their shoulders. Hopefully they can now do the other things that they're good at & become the leaders in other industries as they once we with mobile phones.
Finland - It's very unlikely, but I'd like to hope that this is a bit of a wake-up call to the country. Buying blindly doesn't always lead to prosperity for the company who's products you're lapping up. It also doesn't help you or your country in the long-term. Something I've said again & again since moving here, is that there needs to be more diversity both in general life, but in industries across the country & the product & services that are offered to the people of Finland!