Nokia's phone division burned us so badly we HAD to flog it, says CEO
Shareholders formally approve €5.4bn sale in Helsinki EGM
Nokia’s smartphone strategy was unaffordable, the company’s chairman said at an extraordinary general meeting today, defending the €5.44bn sale of the phones division to Microsoft.
Nokia had called the EGM to seek shareholder approval for the deal.
The EGM drew a far larger crowd to the Helsinki Ice Hall than was usual, some 5,000 people, according to the newspaper Helsingen Sanomat. “Many people want to be present at the historic moment,” the paper reported.
“I understand the melancholy that many people have told me they feel,” Nokia's interim CEO, Risto Siilasmaa, told the EGM attendees.
While Nokia has clawed back some 10 per cent of market share in the past year in many markets, the strategy was unsustainably expensive, even with Microsoft’s €1bn-a-year platform payments.
With renewal of the Microsoft deal looming next year, the board initiated moves in February to ponder various options. One of these included its response should Microsoft launch its own brand of Windows Phones.
From 2011 on, Microsoft was always the most likely destination for any sale of Nokia's phone division. Nokia is almost entirely responsible for the growth of Windows Phone, accounting for over 90 per cent of new WP sales by some estimates. The prospect of the Nokia board losing patience with Elop's Windows-only strategy and switching the company to producing Android phones would have been catastrophic for Redmond.
Once a sale was agreed upon, “the goal was to get the highest price that Microsoft is willing to pay,” Siilasmaa told the EGM.
Some 32,000 Nokia staff thus joined Microsoft.
The venerable industrial company continues, and talked up its HERE maps division and IP licensing prospects at the EGM today. HERE boss Michael Halbherr told us last month that Nokia retained a significant R&D division and was keen on making gadgets.
"We will still surprise people with leading-edge hardware,” Halbherr said.
Those surprising gizmos just wouldn’t be mobile phones. ®