Outgoing CEO Stephen Elop, who'll head back to Microsoft with the $7.2 billion acquisition, said Nokia didn't have enough clout on its own to become strong in the mobile market. September 3, 2013 2:10 AM PDT Stephen Elop, the outgoing CEO of Nokia and leader-to-be of Microsoft's phone business, speaks at a press conference in Finland. (Credit: screenshot by Stephen Shankland/CNET) The decision to sell Nokia's devices and services division to Microsoft for $7.2 billion was a difficult choice, but market dynamics meant it was the only practical one, the Finnish company's outgoing CEO Stephen Elop and interim CEO Risto Siilasmaa said Tuesday. "We need more combined muscle to truly break through with consumers," Elop said in a press conference in Espoo, Finland, where Nokia has its headquarters. "I share the frustration that comes from being so far behind two very large competitors," he added, referring to Apple's iOS Google's Android, but argued that "our goal of becoming the third ecosystem is becoming real." Related stories Microsoft receives less than $10 per Nokia Windows Phone sold Microsoft buys Nokia handset unit: It's an end-to-end world after all Six things Nokia did to make the modern cell phone Microsoft makes its Apple move, bringing Nokia and Elop into fold Ballmer's e-mail to Microsoft employees about Nokia deal Elop moved from Microsoft to Nokia to become its CEO, but Nokia announced today he's stepping down to become executive vice president of the devices and services business. And with the deal's expected closure in the first quarter of 2014, he'll carry that title back to Microsoft, where he stands a chance at becoming the chief executive who'll replace Steve Ballmer. The deal, if it passes regulatory approvals, will profoundly change the mobile market, transforming Microsoft into more of an Apple-like company with integrated hardware and software. It's the same move Google made by acquiring Motorola Mobility, too. Without mobile phones, a market Nokia once dominated worldwide, Nokia will look very different, concentrating on its Nokia Here online mapping service and mobile broadband technology it sells to 600 carriers in 120 countries, with about 32,000 employees transferring to Microsoft. The decision to sell off such a high-profile part of the company was "rational" but emotionally difficult, said Siilasmaa, who is chairman of Nokia's board of directors. "It's evident Nokia doesn't have the resources to fund the required acceleration across mobile phones and smart devices," he said. "Nokia has done great work, however, the industry is becoming a duopoly with the leaders building significant momentum at a scale not seen before." Nokia's fortunes were tied to Microsoft's, but Microsoft was in a tough situation, too, Siiasmaa added. "We cannot expect other vendors to invest as Nokia has grown to dominate Windows Phone," he said, impairing efforts to build a broad ecosystem of hardware and software around the operating system, and Microsoft's decision to sell its own Surface tablet hardware in 2012 also sent a strong signal to Nokia. More to come...
Outgoing CEO Stephen Elop, who'll head back to Microsoft with the $7.2 billion acquisition, said Nokia didn't have enough clout on its own to become strong in the mobile market.
Stephen Elop, the outgoing CEO of Nokia and leader-to-be of Microsoft's phone business, speaks at a press conference in Finland.
(Credit: screenshot by Stephen Shankland/CNET)
The decision to sell Nokia's devices and services division to Microsoft for $7.2 billion was a difficult choice, but market dynamics meant it was the only practical one, the Finnish company's outgoing CEO Stephen Elop and interim CEO Risto Siilasmaa said Tuesday.
"We need more combined muscle to truly break through with consumers," Elop said in a press conference in Espoo, Finland, where Nokia has its headquarters. "I share the frustration that comes from being so far behind two very large competitors," he added, referring to Apple's iOS Google's Android, but argued that "our goal of becoming the third ecosystem is becoming real."
Related stories
- Microsoft receives less than $10 per Nokia Windows Phone sold
- Microsoft buys Nokia handset unit: It's an end-to-end world after all
- Six things Nokia did to make the modern cell phone
- Microsoft makes its Apple move, bringing Nokia and Elop into fold
- Ballmer's e-mail to Microsoft employees about Nokia deal
Elop moved from Microsoft to Nokia to become its CEO, but Nokia announced today he's stepping down to become executive vice president of the devices and services business. And with the deal's expected closure in the first quarter of 2014, he'll carry that title back to Microsoft, where he stands a chance at becoming the chief executive who'll replace Steve Ballmer.
The deal, if it passes regulatory approvals, will profoundly change the mobile market, transforming Microsoft into more of an Apple-like company with integrated hardware and software. It's the same move Google made by acquiring Motorola Mobility, too.
Without mobile phones, a market Nokia once dominated worldwide, Nokia will look very different, concentrating on its Nokia Here online mapping service and mobile broadband technology it sells to 600 carriers in 120 countries, with about 32,000 employees transferring to Microsoft.
The decision to sell off such a high-profile part of the company was "rational" but emotionally difficult, said Siilasmaa, who is chairman of Nokia's board of directors.
"It's evident Nokia doesn't have the resources to fund the required acceleration across mobile phones and smart devices," he said. "Nokia has done great work, however, the industry is becoming a duopoly with the leaders building significant momentum at a scale not seen before."
Nokia's fortunes were tied to Microsoft's, but Microsoft was in a tough situation, too, Siiasmaa added.
"We cannot expect other vendors to invest as Nokia has grown to dominate Windows Phone," he said, impairing efforts to build a broad ecosystem of hardware and software around the operating system, and Microsoft's decision to sell its own Surface tablet hardware in 2012 also sent a strong signal to Nokia.
More to come...
