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It's been 10 years since Nokia sold its phone business to Microsoft

03. 09. 2023 Sunday / By: Robert Denes / Generic / Exact time: BST / Print this page

E xactly ten years ago, Nokia announced that it had sold its phone business to Microsoft. One of the most significant periods in Finland's economic history has come to an end. What were the causes and consequences of the billion dollar trade? On September 3, 2013, Microsoft CEO Steve Ballmer and Nokia Chairman Risto Siilasmaa announced at a press conference that Nokia was selling its phone business to Microsoft.

At 6:00 a.m. on Tuesday, September 3, 2013, Nokia sent a stock exchange announcement announcing the sale of its phone business. The customer was the American software company Microsoft. The purchase price was 5.44 billion euros.

The story of the phones that brought fame, admiration and prosperity to Finland for two decades is coming to an end. The collapse of Nokia's fabled success has been frowned upon in various parts of the world, even though the signs of the impasse had long been visible. At 11 a.m., Nokia organized a press conference in Dipoli. The atmosphere stopped.

The chairman of the board, Risto Siilasmaa, Stephen Elop, who stepped down as CEO on the same day, CFO Timo Ihamuotila, and Microsoft CEO Steve Ballmer were present.

"Nokia is a 150-year-old company that has had several phases. Sometimes the focus is on tissue paper and sometimes on telecommunication cables. The mobile phone period is an extremely great time for Finland and is very important to me personally. This time will always have a place in my heart," said Siilasmaa.

The deal closed on Friday, April 25, 2014. Early the next morning, the Nokia neon sign was removed letter by letter from the head office in Keilaniem. Nokia's neon sign was removed letter by letter from the company's headquarters in Keilaniemi in April 2014. In 2014, it was estimated that Nokia phones generated at least €100 billion in revenue in Finland over 20 years. This is an incredible achievement for a company.

More than a month after the dramatic day, the architect of Nokia's greatness, CEO Jorma Ollila, said he was informed of the deal the night before: "The emotional reaction was certainly the same as many other Finns and Nokia people: sadness and shock," he said. Ollila in October 2013.

In October 2013, former Nokia CEO Jorma Ollila shared his thoughts after learning of the sale of the phone business. Microsoft paid a very heavy price for the business, which was a heavy loss. Already in July 2015, Microsoft wrote down the value of the phone business it bought from Nokia to almost zero. This shows that the deal was profitable for Nokia and its shareholders. Without it, Nokia's situation would have deteriorated significantly, and it would not have been able to invest a significant amount of money in network equipment in the future. If we look at it in the longer term, the question arises how the world's leading telephone company could collapse in just five years. The procurement and production machinery was tuned to be very efficient, the company patented a huge number of inventions, with which it gained a significant competitive advantage. Among investors, Nokia was one of the most interesting companies in the world. At best, the market share of all mobile phones was 40 percent for phones and more than 60 percent for smartphones. In 2007, the company's market value was more than 100 billion euros.

Researchers from the French Insead business school came to the conclusion that the root cause of the problems is to be found in management. Because of this, Nokia did not change from a phone manufacturer to a software company.

In August 2005, Olli-Pekka Kallasvuo was appointed to succeed Jorma Ollila, who started his post in June of the following year. In the same context, Pekka Ala-Pietilä (right), who was considered Ollila's successor, announced his resignation from the company.

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