From emotional fallout to rational analysis: How Finns saw the Nokia-Microsoft deal

From emotional fallout to rational analysis: How Finns saw the Nokia-Microsoft deal

Summary: After Microsoft confirmed it's buying the lion's share of Nokia – Finland's biggest company – how did the country react?

TOPICS: Nokia, Mobility

The sale of Nokia's phone business to Microsoft came as a surprise to many, both globally inside the company's home country of Finland.

The sale was announced last Tuesday, when it was confirmed that Nokia was selling its devices and services business to Microsoft for €5.4bn. On Tuesday and Wednesday last week, former Nokia chief executive Stephen Elop and Microsoft chief executive Steve Ballmer did a tour of Nokia's biggest sites in Finland. In addition to the headquarters in Espoo, the pair visited Salo, Tampere, and Oulu, where Nokia still holds a significant presence, despite not yet completing the round of layoffs announced in July.

While the Finnish government was informed of the situation the night before the deal was officially announced, the country's members of parliament heard of it on Tuesday at the same time as everyone else.

The reaction in Finland has been first and foremost emotional, with much discussion of the importance of Nokia's meteoric rise after the years of economic depression in the 1990s and the dot-com bubble of 2000. A lot of blame for the sale has been laid at the feet of Elop, with the tabloids highlighting his €19m earnings during his tenure at Nokia (After setting up the deal, Elop has moved to Microsoft as VP of devices and services while the sale goes through).

The impact on Finland's bottom line appears to be much smaller than it would've been even a few years ago, according to statistics from research institute ETLA, when at its largest Nokia was very much the country's economic motor.

A decade ago when Nokia was the only smartphone game in town and the iPhone was a twinkle in Steve Jobs' eye, Nokia was responsible for four percent of Finland's GDP, but by 2012, that number was estimated to be around 0.2 percent. At its peak, Nokia used to employ a full one percent of the Finnish workforce, but that's also now in the region of 0.2 percent. Some 40 percent of all the money spent on R&D in Finland came from Nokia in 2009, and after the sale the new estimated figure is 17 percent.

The Finnish trade unions seem divided on the news of the sale. Antti Rinne — the president of Trade Union Pro, the largest private sector union for clerical employees — highlighted that the phones will still be designed by Finns and any decision by consumers to boycott Nokia handsets after the sale will directly affect the Finnish economy.

Pertti Porokari, the president of the Union of Professional Engineers in Finland, had a different take. Porokari told the online business daily Taloussanomat that the organisation is afraid that software development work will slowly move to the US, where the majority of Microsoft's software engineers are.  

Rasmus Roiha, the managing director of the Finnish Software Entrepreneurs Association, found a silver lining, telling business paper Kauppalehti that Finnish software companies will now have two strong partners instead of just the one, and that the sale would open up possibilities for "long-term co-operation".

The ripples of the sale managed to touch even people who have left Nokia behind. The memoirs of the former Nokia CEO Jorma Ollila are to be published in October. While the publication date still stands, the book will undergo some last-minute revisions to incorporate last week's developments, according to Kauppalehti.

Microsoft, for its part, has said it will keep Finland as its R&D base for mobile, and will set up a €250m datacentre in the country to serve its European customers.

Further reading

Topics: Nokia, Mobility

Olli Sulopuisto

About Olli Sulopuisto

Olli Sulopuisto has been covering technology, consumer matters, film and television since 2007. He resides in Helsinki, Finland.

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  • Defeat For Windows Phone

    The acquisition was proof that it is impossible to build a successful independent business around Windows Phone.

    Hopefully what's left of Nokia will see sense, and embrace Android. Or even talk to Jolla about adopting its Meego successor. Remember how the short-lived N9 got a rave reception in every single market where Elop allowed it to be released, in spite of all his attempts to strangle it at birth by making clear it was an orphan from the get-go. Proprietary platforms are a dead-end; the future belongs to Open Source.
    • @ldo17

      I don't think there will ever be a Nokia Android or Jolla phone. Besides, proprietary platforms are not going to die that easily.

      As much as I love Open Source, it is not practical to kill proprietary with it. Not in a short run, anyway. iOS is proprietary. Android *may* go proprietary if Google just wished(Remember Android 3.0 fiasco?). So unfortunately, in one way or other, proprietary is going to live :-(
      • People keep repeating that nobody profits from android

        It's simply not true. Yes there is big competition, yes Samsung is bigger than anything else, but many are enjoying success with android and many are growing by leaps and bounds.

        Why people still repeating it?!
        • because people treat Andrdoid as if it is a golden ticket to riches

          It keeps getting repeated that any company suffering troubles should adopt Android as if it will somehow turn the company around or make them the rock stars there were in the past.

          I think it has been reported that Samsung makes roughly 95% of all profits from Android mobile devices. 5% doesn't go very far and I think it would be hard to point out the "many" that are enjoying success with Android, especially if Samsung occupies that same space.
          • And others OSes?

            Apple don't license the OS, so it's out.
            Nokia WP adventure resulted in the outcome we all know, don't even worth mention others.
            Blackberry is almost gone.
            Tizen is mostly vaporware.
            Firefox OS is not making any revolution.

            There is no such thing as "golden ticket", Makers are playing in a very competitive field, they must work hard and outsmart others. It's not easy, but it can be a highly lucrative market.

            Samsung have about 50% of android market, if they get 95% of the profits they must be doing a few things very well.

            Android is massive, I would never thought it could reach the level market penetration it has now, it can go down, but there are no signs of that so far. I hope Apple can keep or even recover some share as I hope Microsoft to achieve at least 10% share. 80% is already too much for just one player and it's not good for consumers.
    • Android is a dead end

      How's HTC doing building a business around Android? How's anyone but Samsung, including Google/Motorola, doing? Bad.

      I also know from an app builder's perspective what a wasteland the Android market is. Just give me a reason to ignore it. IOS and even WP generate more sales, virtually zero piracy, etc, and from a user perspective don't have the rampant malware and crapapps you find on the Android markets.

      Android is winning the race because it has phones for every market. Most of those, unfortunately, fall in the absolute garbage category -- the lowest rung. Even the top models share a bunch of issues -- fragmentation, malware, battery issues, etc that IOS and WP never have to experience.
      • Doing quite well actually

        HTC market share almost doubled in the last quarter. A number of Chinese phone makers--notably Huawei and Xiaomi--entered the global market successfully mostly because Android lowered the barrier to entry.

        Can't speak to how well Lumia's work, but iPhones are terrible on battery compared to many Andriod devices, and the few Windows phones I have seen long enough to pass judgement (samsung and HTC) are not that great. There are some very well built, high-end Android phones out there better than anytthing available for iOS and WinPhone, with built in stereo speakers and full HD resolution and durable cases. THe portion of "absolute garbage" phones is much lower than "most" and is typical of what you'd find in the notebook PC market.
        Mark Hayden
        • Since you clearly have no experience of Nokia Windows Phone devices ...

          ... I think it safe to ignore your claims that there are better built Android phones out there than iPhone / Windows Phone.

          FWIW, as a proud Nokia 920 user whose wife is overjoyed by her amazing Nokia 1020, I *can* attest to their beautiful, resilient and rock-solid construction, design and engineering. I also have experience of several Android phones & tablets. While some were pretty good construction, there is A LOT of dross in the Android device marketplace.

          HTC, for example, created some pretty middle-of-the-road Android and Windows Phone devices, but knocked the ball out of the park with the new HTC One. The problem? They are losing money. Fast.

          Make no mistake. The Android market is a race to the bottom. Nobody other than Samsung is making any money and nobody is significantly differentiating themselves in a manner that entices customers.

          If Nokia had opted for Android, they'd already be out of business.
          • "If Nokia had opted for Android, they'd already be out of business."

            Says a former softie? Yeah, right.
            I don't think that it's pretty logical to say that, no matter how you want to embellish Nokia and WP8.
            It was extremely unwise for Nokia to voluntarily become a hostage of a single platform, that is not showing any advantage so far. I would likewise not understand then to refuse trying WP8 at all, just like most of other phone manufacturers, that happen to not be run by former softies owing considerable number of MS shares.
      • Hmmm

        Tojuro "How's HTC doing building a business around Android?".............ermm HTC also make Windows Phones.............and it's going EVEN WORSE than Android.....explain that ?!?

        My company develops mobile apps (for SME's), and 99% of them, when I show that presentation slide that illustrates they get 90% coverage with iOS and Android, that's all they go for. It's not we don't push WP (and BB), but no one wants to pay money to develop an app for 3% of the market.

        As for your second point "fragmentation, malware, battery issues, etc that IOS and WP never have to experience."

        Nokia currently sell both Win 7.x and Win 8 Phones, these are two DIFFERENT codebases, as well as devices with only 512mb, add to the mix then new 1080 screens and you will in fact find WP is indeed fragmented.

        PS Go to the Nokia forums where you will find a MASSIVE percentage of Lumia owners do indeed have battery issues.
      • battery issues

        There's no battery issues with iphone5 right?
        Yeh, everybody with an iphone5 is doing just fine having to charge their phones twice a day.
    • Android?

      Microsoft owns them now. It would be a cold day in hell when Microsoft embraced Android (other than to extort royalties).
      • you are jokin right?

        Microsoft loves Android. They are making a ton of profit on them since Android is using alot of Microsoft technology designed back in the early days of windows phone.
        • Microsoft tech?

          Microsoft didn't fevelop much of that--and what it did was not for Windows Phone or Mobile/CE. Microsoft licenses or purchases it from outside. This important to keep in mind because it factors into MSFT's future. MSFT is not a good innovator and so it has to rely on licensing of questionable patents.

          Patents are also 20 year lifespan. After they expire they are worthless and everyone has the right to implement the covered invention. Since MSFT makes most of its money from Android through extortion of license fees than it does off its own REAL technology (Windows Phone) then its future is at risk when its patents expire--and it will be getting harder over time to get new patents. Thus MSFT is taking the right strategy in attempting to preserve its Windows Phone platform depite it being far less profitable for then than Android.
          Mark Hayden
        • Seriously?

          MS patents against Android begin with 8.3 file name compatibility and end with NTFS support.
          In other words:
          No SD Slot=No 8.3 filenames/FATnn/NTFS compatibility required=$0 for MS.
    • Android is not the "Holy Grail"

      While I have nothing against Android too many commenters act as if Nokia just went with Android their fourtunes would have returned and that they be on top of the pile now as if Android is the Holy Grail to profitability or something.

      While Samsung makes a ton off Android there are plenty of companies struggling to carve out their spot, ie: HTC, LG, Sony, etc.

      There's no guarantee that Android would have turned Nokia's efforts around.
      • Nokia and Android

        Android would have allowed Nokia the freedom to innovate beyond the capabilities of Windows Phone.
        Android would have allowed Nokia to capture the ready made Android market instead of requiring the users to abandon a top tier mobile ecosystem and go to second tier mobile system.
        Nokia brand was very strong and only diluted due to being stubborn with proprietary OS.
        Nokia may or may not have been as big as Samsung with Android, but they certainly would not have been forced to capitulate and rely on Microsoft for rescue.
    • Which Open Source Android did you mean...

      Google's or Samsung's or maybe one of the major carriers? And which version? (yeah I know it's just layering for the most part, but to the average consumer, there's still fundamentally different). Most consumers are NOT going to be installing their own ROM and so the platform has to be judged on its own merits OOB and over the lifetime of the device.

      I'm relatively technical (DB specialist), but even I was reluctant to risk bricking a device I paid several hundred dollars for just so I could get rid of Verizon's bloat. Fortunately, WP8 affords me all the functionality I needed from my Droid X (phone, web browsing, navigation, occasional gaming), and affords a level of synchronization and ease of use that my Droid could not. Don't get me wrong, I enjoyed my Droid, but prefer WP8.

      My wife recently purchased a Droid M. Suffice to say, I'm having to provide a lot of support to find this feature or that setting because its very different from the Droid X she previously had.

      Fragmentation, carrier lock-in, inconsistent updates, "busy" administration all work against Android. Obviously, it's doing very well in spite of, which suggest the primary drivers are price, brand and hardware, more or less in that order, and not the OS.
  • Defeat?

    I don't think this is an admission of defeat at all. I actually think it's the opposite. Now that Ballmer is leaving, I think it's a call to arms. Microsoft intends to fight--really fight--for the mobile market.
    • Re: I think it's a call to arms

      So where are the troops who are supposed to answer that call? Either all gone or defected to the other side.

      Microsoft is fighting alone.