Nokia Set to Sell off its Mobile Phone Business to MicrosoftAssociation of Business Training
November 20, 2013 — 834 views
The shareholders of Nokia have given their approval to sell the mobile phone business of the company to Microsoft. The deal might close after regulatory approval in the first quarter, next year. In September, Nokia had agreed on licensing its patents and selling its services as well as mobile phone business to Microsoft. Nokia will receive close to $7.35 billion for this deal. The company is said to have signed this deal after it failed to recover in the smartphone sector.
The approach comes as a representation of the final steps of the company before its struggle in the cellphone division is taken over by Microsoft. But it also raises questions about the future of the company.
Sad Moment but Nothing to be Disappointed, says Chairman of Nokia
Interim Chief Executive and Chairman of Nokia, Risto Siilasmaa recently said in an interview that this period has been very challenging for the company. He also mentioned that when he joined the company as the chairman he hadn’t even thought of the possibility of such a situation, so there are definitely a lot of emotions attached to the whole process.
Nokia was one of the largest mobile handset sellers at one point of time. The company sold around 64.5 million handsets during the third quarter of this year, which still makes it one of the largest mobile handset selling companies of the world. But lately Nokia has started losing out on the smartphone market which is being dominated by companies like Apple and Samsung.
Move Comes after Severe Dip in Market Share
Nokia revolutionized the mobile phone market as well as technology in the 1990s and went on to be the largest handset maker in the world. Information given out by a research company named Gartner reveals that even till 2009, it captured around 40 percent of the global share in smartphone market. But presently the market value of Nokia is around $30 billion as compared to $250 billion in 2009. This means that is just holds around 12 percent of the global market right now.
Head of ‘Here’, which is a mapping business of Nokia, Michael Halbherr said that no doubt that this is a sad moment but then the company will have to look past it. ‘Here’ will still remain a part of Nokia. He further said that the kind culture that Nokia followed did help it in tasting success, but probably wasn’t what was required to excel in the age of smartphones.