Nokia Sold Its Mobile Brand To Microsoft A Sad Death Of A Memorable Brand In India

Beleaguered Finnish mobile phone maker Nokia will sell its mobile phone unit to US group Microsoft for 5.44 billion euros ($7.17 billion), it said on Tuesday.
Nokia will grant Microsoft a 10-year non-exclusive licence to its patents and will itself focus on network infrastructure and services, which it called “the best path forward for Nokia and its shareholders.”

The company also announced the immediate departure of chief executive Stephen Elop. He will be replaced in the interim by Risto Siilasmaa, Nokia’s chairman of the board.
Nokia was long the global leader in making mobile phones but has been overtaken by rivals Samsung and Apple as it struggled to establish winning business models and mobile devices.

The transaction announced Tuesday is expected to be completed in the first quarter of 2014, pending approval by Nokia shareholders and regulatory authorities.

Some 32,000 Nokia employees are expected to transfer to Microsoft, including approximately 4,700 people in Finland, the company said.

The operations affected by the transfer generated approximately 14.9 billion euros in 2012, or almost 50 percent of Nokia’s net sales, the company said.

Of the total purchase price of 5.44 billion euros, 3.79 billion relates to the purchase of Nokia’s Devices & Services business, and 1.65 billion relates to the mutual patent agreement and future option.

Last month, Nokia finalised the purchase of German engineering giant Siemens’ 50 percent stake in Nokia Siemens Networks for 1.7 billion euros.

NSN, which is specialised in high-speed mobile broadband, was set up as a joint venture between the two companies in 2007, a partnership that expired in April. The unit has posted stronger earnings than Nokia’s mobile phone business.

NSN posted a net profit of 8.0 million euros in the second quarter of this year, compared to Nokia’s net loss of 227 million euros in the same period.
Nokia was one of the few brands, especially in India, that could match the emotional connect Apple had with its consumers. Now this brand is gone. While full details are still awaited, there is a strong possibility that the world may never see a Nokia phone again. And Nokia fans, who feel they have an emotional connect with the brand, are not happy.

According to the deal between Microsoft and Nokia, the software giant is buying the devices and services division of the Finnish company. It is not buying Nokia brand. But Lumia and Asha brands are changing hands. Nokia will continue to be a separate company and it will have full rights on “Nokia” branding. But it may never make a phone again.

For Clinton Jeff, a blogger who started writing about phones because he fell in love with his Nokia N95 in 2006, the announcement of Microsoft-Nokia deal broke his heart. “We knew it was coming. But it was still a surprise. It still makes me very sad… what the heck! Nokia had started coming back in the game. They were doing good in the low-end of the smartphone market,” said Jeff, who blogs at UnleashThePhone.com.

Dhruv Bhutani, another blogger who started writing about technology because he loved his Nokia phones too much, has the same sentiments. “You grow up with a brand, see it becoming the world leader. You start off your career because of that brand. And then see it slowly die out… (it) doesn’t feel very good,” he said.

Jeff said that while Microsoft would make phones that would be similar to what Nokia was producing, he don’t think many people would get the save vibes from those products.

“Nokia was one of top brands in India. It was trusted. People don’t think about Microsoft in the same way. They associate it with Windows, Internet Explorer and that kind of stuff and not with solid phones,” said Jeff. “I am sure we will see Nokia-like features and design in phones made under Microsoft branding but they won’t have the same emotional appeal, not at least me.”

Judging from the reactions to Microsoft-Nokia deal on Twitter, this sentiment was shared by many.

“F**k the business sense behind it. I am too bummed for the personal touch & identity which Nokia had. That’s why it was special,” wrote Yash Maheswari, another blogger who often reviewed Nokia devices.

Narendra Kumar, who describes himself as a gadget freak on his Twitter page, summed it aptly. “Sad day for all Nokia fans. No more Nokia Now,” he tweeted

Source:TOI