14 DAY TRIAL // Now that Nokia’s Devices and Services division has been successfully acquired by Microsoft, the Finnish company is left with only three businesses to focus on. Nokia fans wondering what’s next for their favorite brand may find some answers by reading further.
Immediately after closing the deal with Microsoft for its mobile phones business, Nokia appointed Rajeev Suri as president and chief executive officer, effective May 1.
He had previously been head of Nokia Networks and Solutions since 2009, which might be a hint on what the Finnish company plans for the future.
Without the Devices and Services division, which is now part of Microsoft, Nokia’s only businesses that could bring profit are Nokia Solutions, Nokia Networks and HERE.
Each of these businesses is focused on different fields of activity, such as networks, location and technologies. Obviously, not all have the same potential, thus they are likely to bring more or less revenue.
For the time being, Nokia Networks brings about 90% of the Finnish company’s revenue. The other two businesses are only 10% of the overall income made by Nokia each year.
However, in order to survive on the international market on all fronts, Nokia needs to innovate or acquire new smaller companies capable of doing that under its brand.
Nokia has recently confirmed that after selling its Devices and Services business to Microsoft, it has received slightly more than the €5.44 ($7.17 billion) amount that’s been announced initially.
After paying some of its debts, various analysts claim that the Finnish company will be left with around €2 billion ($2.8 billion), but these are just speculations.
Regardless of the amount of cash that Nokia gathered in its coffers after selling its mobile phones division, there is hardly any room for acquisitions in the telecommunication infrastructure market, as it was rumored lately.
We reported yesterday that news about Nokia’s possible bid on telecommunication giant Alcatel-Lucent artificially increased the value of the latter company’s shares at the Paris Stock Exchange.
Unfortunately for Alcatel, a takeover by Nokia is highly unlikely given the former company’s value on the market, which is now set to around €11 billion ($15.3 billion).
The amount is way out of Nokia’s financial possibilities for now, but a merger could be possible and would make sense given the rivalry between European (Ericsson, Alcatel, Nokia) and Chinese (Huawei, ZTE) telecommunication companies.
That will strengthen Nokia’s position on the network infrastructure market and would eliminate a potential competitor.
Now let’s see what Nokia has in store for its other two businesses. Well, as a matter of fact, Nokia has just announced that it has invested $100 million (€73 million) in a fund meant to grow the HERE mapping and location products in cars.
Here is what Michael Halbherr, CEO of HERE, had to say about Nokia’s move, “NGP's Connected Car fund underscores that connectivity is rapidly reshaping what is possible in the car environment. We believe that connected cars equipped with precise location awareness and sensor data can become powerful devices capable of helping drivers make sense of the world around them.”
But that is not all. As some of you may already know, Nokia plans to bring its HERE apps and services to Android and iOS platforms. This started as a rumor a few days ago, but it seems very plausible. Obviously, we’re talking about the whole package, not just the mapping service.
Nokia has already started to invest some of the money it received after selling its devices and services business and I expect the company to be even more active in the next couple of months.
We will certainly hear more from Nokia, but, unfortunately, not when it comes to mobile phones. What do you think Nokia should invest in? Share your thoughts in the comments area.