Nokia Up For Grabs

The speculation in the back bar of Helsinki’s Sir Eino Olutravintola is that Nokia is up for grabs and that  Microsoft or Samsung are the most likely purchasers. Samsung went out of their way to deny it.

Losses and restructuring costs of around Euros 2bn over the next couple of years could wipe out the company’s cash balance, according to Societe Generale.

It is estimated that Nokia will run out of cash next year at its present burn-rate. Nokia had Euros 4.9 billion in cash at the end of March. At the end of December it had Euros 5.6 billion and, at the end of March 2011 it had Euros 6.4 bn. Nokia has Euros 4.75 billion of debt.

At $3 the Nokia’s shares have fallen 90%in 5 years.

In the five years, that is, since the launch of the iPhone. That year , 2007,  Nokia’s shares were worth $28.
Nokia’s market cap is $11 bn. At one time it stood at over $200 bn.
At $11 bn, Nokia’s market cap is not much more than ARM’s market cap at $10 billion. Incidentally the stricken STMicro’s market cap is $4.7 billion now that ST shares are down to $3.

Nokia management went mad. They declared themselves to be a software and services company.

In fact they depended on phone sales to survive.

Having misidentified the business they were in, Nokia management focused their energies in the wrong areas.

What they needed was a product guy CEO – someone who could make a stunning, covetable, pure-sex phone.

What they got was Stephen Elop, a software guy who presided over the launch of the dreary Lumia.

Those whom the gods would destroy they first drive mad.

Thor, or some gloomy old Nordic god, drove the Nokians crazy.

Tags: burn rate, cash balance, grabs, lumia, stmicro

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23 Comments

  1. AndyRem
    June 22, 2012 10:54

    I’m guessing that display of apparently random words was sent from a “smart phone”? :-)
    I’m with Mike Bryant on phones – not on the monk thing though.

  2. David Manners
    June 21, 2012 13:36

    Ah Yes, the guy who said in 2007 that the iPhone would
    be a six month fad.

  3. Hey-nonny-nonny-mouse
    June 21, 2012 13:30

    Don’t blame Elop – he inherited the shambles from the failure of the previous incumbent, the bean-counter Olli-Pekka Kallasvuo

  4. georgegrimes-ti-com.myopenid.com
    June 19, 2012 16:51

    Ah, yes, honesty…a “failing” that simply cannot be tolerated in a CEO. Whatever would happen if he told the market analysts the truth?? The stock markets would become absolutely apoplectic at such irrational, insane behaviour!!

  5. David Manners
    June 19, 2012 14:41

    That’s easy to answer, AnotherAnonymous, you’re honest.

  6. AnotherAnonymous
    June 19, 2012 14:22

    I always wonder, why am I not CEO ? I can screw up just as badly and I will agree to do this for only half the salary…

  7. David Manners
    June 19, 2012 13:14

    You know. themobmob, I often ask why these companies appoint a succession of duds to be CEO and the answer I usually get is: ‘He presents well’. I don’t suppose any board would appoint Noyce, Moore, Sanders, Gates, Jobs, Page, Brin or Zuckerberg to be a CEO following a normal board-room selection process.

  8. themobmob
    June 19, 2012 12:23

    I am just staggered by the incompetence of so many “so called” technology companies. How come someone at Nokia didn’t just buy Palm/Webos, before the idiot Leo Apotheker screwed it up. Webos and Nokia hardware could have been a worldbeater. No doubt the idiots in charge, after losing everyone’s pension pots, as well as their employees jobs will award themselves bonuses of millions. Must stop myself now ,,,,,,

  9. David Manners
    June 17, 2012 10:21

    Yes, Bitter, there’s something rather pukeworthy about that photo

  10. Mike Bryant
    June 16, 2012 09:51

    I totally agree Steve. I remember at one of our industry presentations that I put up a slide with an early leaked photo of the N9 and stated this was Nokia’s saviour.
    Then they went and committed hari-kari or whatever Finns call it. It’s much harder to predict that sort of thing.

  11. Bitter
    June 16, 2012 07:39

    Just look at that! Cute, isn’t it?
    http://teknikdebatt.se/system/images/372/original/stephen_elop_steven_ballmer.gif
    If anyone had any hope for Nokia going with anything other than a Microsoft OS, that image should have them shake their heads and start polishing their resume’s.

  12. Ian
    June 15, 2012 22:00

    I guess Société Générale know a thing or two about several-billion-euro holes in the balance sheet.

  13. Steve
    June 15, 2012 17:29

    They *had* a pure sex phone. Meego *finally* bore fruit after years of development in the shape of the N9. It was released to near universal acclaim … right after they announced the death of Meego.
    Idiots.

  14. Anon
    June 15, 2012 12:24

    What? Using a phone for voicecalls? Mike, you are so stuck in the 90`s

  15. David Manners
    June 15, 2012 11:55

    Apologies Mike I shouldhave saidbeautywhich is, of course, only skin deepanddoesn’t extendtoRF quality. Sex of courserequires deeper qualities thanskin – wriggliness for one

  16. Mike Bryant
    June 15, 2012 11:40

    If the S2 is sex (first phone to actually dispense with voice quality as an attribute altogether) then I’m becoming a monk !!

  17. David Manners
    June 15, 2012 10:24

    Thanks cheese it seems rme Samsung finally did sex with the S2 and the new Mote Razr is also pure sex. Seems an entry level qualification nowadays

  18. David Manners
    June 15, 2012 10:15

    Sorry juanlavista I meant euro but the market cap figure is correct

  19. June 15, 2012 09:51

    “Pure sex phone” David, if only some one had packaged the advise as nicely as this, but a few years earlier, who knows, it might have hit the right chord somewhere!

  20. Bitter
    June 15, 2012 08:52

    The Finns also have a proud history of fighting and dying for Sweden, in the place of the cowar.. Swedes, I mean.
    Now they are busy letting an american ruin the crown jewels of the country.
    Perkele indeed!

  21. neighbour
    June 15, 2012 07:29

    Actually Thor was a god for the vikings, the people of Finland were (and are) culturally and linguistically very different.
    Interestingly, to this day our neighbours the Finns depend on one of their old gods for swearing. And they do that quite a bit.

  22. JuanLaVista
    June 15, 2012 07:25

    I know you think things are bad at ST but $3? Don’t you me $5?

  23. Bitter
    June 15, 2012 07:09

    David, you must rewrite the “Worst Board in History” blog and redirect it correctly to Nokia’s.
    First arrogantly dismissing the iPhone and Android, then failing to come up with competitive smartphones, after that, hiring a Microsoft executive and asking him to go all-in on a mobile operating system that already was shown to be failing in the market. Insane.
    Not that they have much to lose anymore. The top Linux/Meego/Maemo guys walked, or were continousuly booted during his tenure.
    All what is left is to watch in awe as Elop and the ‘Board crashes the titan into oblivion.
    Question is: was it intended?

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