Nokia said to be considering sale or merger as profits tank Nokia is reportedly exploring the possibility of a merger or acquisition in the face of intense pressures on profitability. Loquacious sources told Bloomberg the Finnish comms outfit has hired advisors to review its options – which could include selling parts of the business or merging with a rival. Other possibilities include …
Maybe because they have always had more than a phone division?
https://en.wikipedia.org/wiki/Nokia
"The company has operated in various industries over the past 150 years. It was founded as a pulp mill and had long been associated with rubber and cables, but since the 1990s has focused on large-scale telecommunications infrastructures, technology development, and licensing."
@Nate: "more than a phone division"
Indeed, I used to work in IT/Telecoms and we had a few Nokia phone switches. During that time I spent a fair amount of time assimilating other companies, and stayed in a number of Travel Taverns, and often the Telly in the room was a Nokia.
Hauwei has been successful in selling budget smartphones and it compliments their Network business.
HMD can bring the Nokia name back into the public conscious (and already has to a small extent. I'm writing this on a Nokia 4.2), they now just need to make a flagship that can compete with offerings from Samsung, Apple, Sony and etc (and maybe increase the marketing budget.) They could do really good of they can ride the late 90s-2000s nostalgia wave that will be coming I to full force in the next coming years.
Nokia should also consider diversifying out side of Networking (it wouldn't be a bad idea for them to invest in Varjo, which is another Finnish company that specializes in premium, Enterprise-Grade VR headsets that cost more than most people's cars, for stuff like engineering and simulators (they have sold the headsets to companies including Volvo and Audi.)
Nokia can diversify and can become successful again, it just depends on whether they decide to do anything.
Nokia can't risk failing because it would mean that the Mobile Networking market would essentially become a Duopoly between Ericcson and Huawei promising that they're totally not spying for Xi Jinping.
Diversifying into consumer tech isn't really Nokia's area of strength - they tried getting into digital health with the Withings acquisition which they then did nothing with and ultimately sold back to the founders taking a massive bath in the process.
See also Ozo, the £50k 360 degree camera which they spent a fortune on and then shuttered. https://www.wired.co.uk/article/nokia-ozo-360-vr-camera-release-date-price
Neither of these types of market are big enough to save them anyway - they need to make 5G a success.
"Diversifying into consumer tech isn't really Nokia's area of strength"
Maybe not at this point in time, but until about 2010, if you wanted a mobile phone, Nokia, closely followed by Ericsson, was pretty much where it was at. They didn't "own" the market, but they were certainly the biggest player.
(Yes, the iPhone had started to make an impact by the end of that period, but the majority of people then (and, globally, still) could barely contemplate, let alone actively consider, spending that sort of money on a phone...)
Doesn't make much sense to me outside of massive equipment failures, the tech is still so new. I also find it consistently sad that I see so many comments here touting Chinese for 5G(specifically for 5G infrastructure most often referring to European deployments) when you have two 5G companies in Europe(possibly more), would be nice if they saw (a lot) more local support.
"I also find it consistently sad that I see so many comments here touting Chinese for 5G"
Huawei can sell you a 5G infrastructure that works now. End-to-end catering for almost all current functions for 5G either as Huawei parts or tested third-party parts with documented integration steps.
Ericsson can cobble together a 5G infrastructure in 2020/2021 that will have a few of the pieces delivered as upgrades or on a 4G infrastructure and if you want some functionality, you can add third-party components at your own risk.
Nokia are likely one year behind Ericsson assuming Intel can deliver parts in 2020.
ZTE are behind Nokia, but target the cost-conscious end of the market so make up for it on TCO and don't need to be as bleeding edge as Huawei/Ericsson/Nokia.
Samsung have Korea and anyone else they can sell to.
Add in Nokia and Ericsson having had a few lean years and big R&D investments in 5G and you can see the risk they are carrying until they can get products/solutions in the market. Huawei's lead means both companies will be less profitable than they would like and I would be surprised if we see both still in the market when 6G roles around. Yes...the last 25 years of manufacturing telecommunications equipment has been brutal.
Reportedly their "antenna kit", which is how most reports describe it (I think they mean RAN) has better technology than their competitors and can support more users with less equipment, saving costs on purchasing. Probably more importantly, it also apparently requires fewer base stations in areas with lower density of subscribers (i.e. anywhere outside of major cities, which accounts for a lot of base stations if a carrier is to provide coverage nearly everywhere). This is apparently why mobile operators are so keen on buying Huawei's RAN kit, even if they plan on buying the rest of their kit elsewhere.
In third world countries, which account for a big share of the global market, Huawei also provide complete, pre-engineered, turn key systems which saves a fair bit of money on engineering costs. In Western countries carriers tend to mix and match kit from different companies. This however is not the practice everywhere, and the carriers often just want to go to a vendor and buy a complete mobile network, something I understand only Huawei have a credible offering for.
"Reportedly their "antenna kit", which is how most reports describe it (I think they mean RAN) has better technology than their competitors"
Huawei 5G RAN: Working and optimised with a variety of options for different environments and able to work on 4G or native 5G infrastructure.
Ericsson 5G RAN: Working with a limited number of tested options for a limited number of environments and able to work on 4G infrastructure with 5G very soon.
Nokia 5G RAN: Working! We can make a few and do more testing.
Why has Huawei got such a large advantage? Lower costs and the company has been profitable and growing at the expense of their competitors. Ericsson and Nokia have also persisted with legacy products that have taken R&D away from next-gen mobile while Huawei have benefited from Chinese growth and economic policies and possibly some under handed methods to gain market share early in their company history.
I have heard described more efficient wireless backhaul which is a function of more robust antennas combined with Huawei's end-to-end component load distribution as being an advantage. If Huawei can resolve frequency hops quickly and ensure delivery of higher volumes whether in the low, mid or high frequency bands thereby increasing volumes and reducing latency, and transport backhaul for distance, this would effectively reduce the amount of equipment required.
This means less requirement for FDDI infrastructure which is a particular problem in Canada (distances (cost)), and the US (lack of investment in infrastructure, concentrated capital spend spread amongst 120 + or - telcos/providers). And of course a problem for less wealthy nations as well.
And lower capital costs.
So Huawei are massively more efficient than Nokia and Ericsson?
According to Deutsche Telekom (Deutsche Telekom tells Nokia to shape up), Nokia is terrible to deal with.
Nokia has been loosing a number of customers to Ericsson.
Get a few of our best engineers and sponsor them to go an work in Huawei R&D, send our best students to the Chinese universities. See what they can learn and then bring them back to apply their new knowledge in western firms.
Learn from the best, in more ways than one.
Except Huawei do their R&D in Germany, Sweden, the US, France, Italy, Russia, India, and China already.
If you take their claim that they are owned by the employees at face value it makes sense that there is much more investment in the company than shares (or pay checks of the execs).
As a share holder which is also an employee would you vote for short term gains or would you vote for more R&D and better worker pay/conditions?
You can see this borne out in the difference in spending in R&D of Huawei compared to Qualcomm (15bil vs 5bil).
I guess they've got to decide if they want to allow mergers such as Nokia-Ericsson to go ahead or carry on not allowing them and watch them get picked off by foreign corporations (see Siemens-Alstrom).
If the EU really is to be a large economic bloc then I guess these kinds of mergers have to go ahead.
Nokia-Ericsson would likely kill both companies.
One of the two dying (it will be Nokia short of a miracle) and the IP/profitable parts being sold cheaply to Ericsson would leave us with one western telecoms manufacturer and give Ericsson another 5 years to see if it could become self sustaining. I'm not sure that is sufficient time for Ericsson to kill off legacy parts and allow them to compete evenly with Huawei.
Depending where you are positioned in the industry, that may seem optimistic or pessimistic.
When I first heard Bill Barr hypothesize about supporting investment in Ericsson or Nokia, to counter Huawei, to build out the US 5G infrastructure, I immediately thought about Cisco. Back in the day it was Cisco that was America's most favored investment versus NORTEL so rightly or wrongly it forms part of US historical thinking on telecommunications.
Like NORTEL did, I would use someone like a Flextronics to build on Cisco's behalf at least in NA.
Once bitten, twice shy would be Microsoft's probable reaction to overtures from Nokia. Nokia has been hogtied for too long by red tape and political interference: something of a holy cow here in Finland. Globally, the company has a workforce of over 100 000, which should have been reduced years ago. And chronically inept management hasn't helped.
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I'd think Nokia would be an interesting purchase for those companies trying to break Qualcomm's stranglehold. Apple, Samsung, even Intel (though they sold their 5g modem interests to Apple already I believe?) just to get their hands on Nokia's 5G patents to use to battle Qualcomm and its predatory 5G patent licensing strategy around modems and related technologies.
I have one of the current Nokia android one phones and it is easily superior to the Samsung or Huawei equivalents, and as crapware free as an android device can be. Not to mention reasonably priced. The brand name of Nokia is, unfortunately, dirtied beyond recovery it seems.
I'd say I don't get it, but actually, I do. Too many people are sheep and buy for marketing reasons not technical competence. I guess Nokia might also be sitting on a pile of bad debt from earlier losses.
Peak Nokia to me was N95 iteration. Excellent hardware.
Downhill ever since. They could not let go of Symbian and would not see beyond their noses. Could have easily adopted Android OS with their super hardware. Yet became very complacent. Their arrogance showed in their customer servcies and support (lack of) for every problem encountered in their other (semi) smartphone offerings.
M$ looted the rest of their IP and ran it into ground with a lot of talent withered.
Clutching at straws now.
They could not let go of Symbian and would not see beyond their noses. Could have easily adopted Android OS with their super hardware. Yet became very complacent.
Actually they could. And did (to an extent). Unfortunately interal fighting and politics stood in the way of success.
Elop sent out the burning platform memo and released one MeeGo phone (which received rave reviews and awards) in limited numbers in limited markets due to their contractual agreement with Intel, then canned it and went to Winphone.
Instead of a measured planned transition from Symbian to MeeGo there was sudden jump to Winphone which nobody (operstors, developers, customers) wanted.
That was Nokia's phone division's downfall.
"Clutching at straws now.".
Well, yes and no, they employ +100.000 people world wide and the "networking" part is older than the cell phone.
The first modem I used in about 1972 was a Nokia modem. But it is indeed a brutal market.
https://en.wikipedia.org/wiki/Nokia
Elop was only the symptom of the PHB NIMBY disease infecting the top and manglement levels of Nokia with Symbian fighting Maemo and Meego. should have launched N900 in 2006 PROPERLY specced hardware instead of making so many blunders and refusing to launch a "phablet" back before the iPhone or Samsung ...
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