Many believe that Nokia Corp. has lost too lot to regain its past success and acquisition of its devices division by Microsoft Corp. will barely help the software giant to become a viable competitor for Apple, Samsung and other players. But the former chief executive of Nokia believes that the transaction will actually make Microsoft much more competitive thanks to experience that the Finnish company has.
“We are bringing product, we are bringing technical expertise, we are bringing sales and marketing expertise. Taking a company that has been predominantly hardware and a company that has been predominantly software and putting them together is very complementary,” said Stephen Elop, the head of devices division at Nokia, in an interview with Cnet News web-site.
The former head of Nokia, who stepped down the day the Nokia-Microsoft transaction was announced, believes that Nokia’s team will help Microsoft to better understand such things as life-cycles of devices, design, volume manufacturing and many others.
“[Nokia would bring Microsoft] a couple of things; the art and science of building a great product and understanding how to do that – for great design, for a variety of things and how to do that at scale. […] Being able to manufacture and distribute at scale is something that I think is very important. I think we know a lot about managing product life cycles – how much do you build to begin with, when do you ramp up? How to manage that. But we also bring a great deal of technical expertise. Take material science and what you can do on a phone or a tablet that maybe has never been done before. We have more experience than most in thinking those matters through. Imaging is [another] great example. We have a core competency […] how to design the antennas of the device,” said Mr. Elop.
Microsoft Corp.and Nokia Corp. in early September announced plans whereby Microsoft will purchase substantially all of Nokia’s devices & services business, license Nokia’s patents, and license and use Nokia’s mapping services. Under the terms of the agreement, Microsoft will pay €3.79 billion ($4.996 billion) to purchase substantially all of Nokia’s devices & Services business, and €1.65 billion ($2.1745 billion) to license Nokia’s patents, for a total transaction price of €5.44 billion ($7.1691 billion) in cash. The transaction is expected to close in the first quarter of 2014, subject to approval by Nokia’s shareholders, regulatory approvals and other closing conditions.