The more time passes, the better Nokia's sale of the handset business to Microsoft looks. Just imagine how Nokia's sale is going to look a few years from now.
Microsoft touts buying Nokia's handset business — now run by Stephen Elop inside the software giant (again) — as a transformative deal. The transformation rests with the old Nokia, now a networks, patent-licensing, and navigation company.
Last week, Microsoft welcomed Nokia's handset business into the fold, talked about the future and had an optimistic view of the mobility landscape. Nokia's earnings results, the last with the device business, tell a different tale.
The device business — Lumia and other mobile phones — are represented by discontinued operations for the most part. Simply put, the mobile phone business is in freefall compared to a year ago.
The loss for the quarter was €326 million.
Keep in mind that the year ago was no picnic either. Here's a look:
Microsoft's job now is to stop the bleeding, harness Nokia's hardware knowhow, and get its act together for what will be a critical fourth calendar quarter and holiday season.
Nokia's job is to spend Microsoft's money and retool. To wit:
- The company will reinstate a dividend since the bleeding device business is gone.
- Buy back shares.
- Cut debt.
- Throw shareholders a special dividend.
Meanwhile, new Nokia CEO Rajeev Suri will build the company's networks business, invest and monetize its HERE business or "location cloud," license its patents, and develop new products. Nokia's tech unit sees areas such as "low-power connected smart multi-sensor systems, distributed sensing, and intelligent interplay between various types of radio technologies" as fertile ground.
Down the road, perhaps the device swap with Nokia and Microsoft will be a win-win. Microsoft's purchase of Nokia wasn't terribly expensive and if the software giant cures its Apple envy maybe the deal is a steal.
But in the short term, Nokia has a better hand to build on. Advantage: New Nokia.
Read more on Nokia
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- Nokia reveals how it would have looked if devices unit never existed