Finnish PM rules out Nokia rescue package
Local heroes must sink or swim
The Finnish Prime Minister Jyrki Katainen has ruled out any government rescue package for ailing Nokia, saying the company is on its own.
If any Finnish company is too big to fail, it would have been Nokia. At its height, the company was responsible for a quarter of all Finnish exports and accounted for nearly 5 per cent of the Finnish economy. Nowadays, however, that's down to less than 1 per cent.
Many in the financial markets were betting on the politicians to save the day, but the PM explained that that's not how they do things down Helsinki way.
"This is not our business. We are developing Finland into a country where companies can do well, but this is not the way of support along which the government will go," he told Reuters.
Katainen made his comments during a visit to the Finnish town of Salo, home to a long-established Nokia factory that employs about 10 per cent of the local workforce. It's being shut down as part of Nokia CEO Stephen Elop's restructuring plan announced this month, which will see the workforce cut by over 10,000 people and many senior management jobs lost.
The news came as Microsoft released the first concrete details of its Phone 8 operating system that Nokia is tied to. Microsoft has recoded the platform so that it shares kernel features with Windows 8, which is good for integration but bad news for smartphone vendors, since upgrading existing handsets is impossible.
True, Redmond is releasing Phone 7.8, which gets you the same start screen as Phone 8 but little else. But that isn't going to help Elop's inventory of unsold Lumia handsets that are going to be outdated when the new OS is released this autumn.
Research this month showed that Nokia's shipments for the last quarter fell by 40 per cent as Apple and Samsung slurped up the lion's share of the market. It all makes Microsoft's predictions that it will be able to transfer Nokia's Symbian massive user base onto Windows Phone look a tad optimistic.
Nokia's shares fell slightly at the news that there would be no government help, although at $2.40 a share there's not much further to fall. In 2000 the company's shares peaked at nearly $59, and since Elop joined the company from Microsoft – the first non-Finn to lead Nokia in 150 years of operation – Nokia's share price has fallen by three quarters, and Moody's has already relegated its stocks to junk-bond status. ®
No Windows phone for me
I am never going to buy a Windows phone from Nokia, or anyone else for that matter. My last Nokia phone that I buy might be Nokia 701 Symbian. But I am still considering that options. Since my current phones are rather new.
Too bad that there are not many 3G phones that support 850/900/1700/1900/2100 as Nokia N8/700/701 does. I want nothing less.
Sad story about Nokia. But this is what you get when you hire a Microsoft office pencil pusher to work in your company. The lesson. Do not deal with Microsoft unless you want your company to go the bankrupt way.
Flops mission is complete.
Blamer sends his thanks.
Re: Flops mission is complete.
Because when the share price is right down MS will be able to pick up all the patents (and maybe any hardware infrastructure) cheap.
Seriously, I doubt Eflop meant to do this, after all it was nearly too late when he joined. Still, I believe he did put the last nail in the coffin by going MS.
I'm very sad about Nokia. I was a big Nokia fan for many, many years, but their lack of impetus and finally their dropping of the new version of Symbian and Meego (both of which, IMO, could have been winners) just before they were ready to go, pis$ed me right off. I defected to Android, and it looks like that's where I'll be staying for the foreseeable future.