Nokia reveals how it would have looked if devices unit never existed

Nokia reveals how it would have looked if devices unit never existed

Summary: With the sale of its devices unit nearly closed, Nokia has detailed how its bottom line would have looked if the business had never been a part of the company.

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TOPICS: Nokia, EU
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Nokia's next earnings report will be the first time it will exclude revenues from its devices and services business, and the first time it discloses the financial outlook for its new intellectual property related Advanced Technologies business.

For those wanting to get an idea of the financial health of 'new Nokia' from those results, the company has released a primer on how the company would have looked like over the past two years had it not been operating its devices and services business, which is expected to transfer to Microsoft this quarter. The primer is intended to give Nokia-watchers an idea of how the company is doing on a like-for-like basis, showing how recent results would look with its handset business stripped out.

So, on Thursday when Nokia releases its Q4 2013 results, it will report the financials its three remaining businesses — Nokia Solutions and Networks (NSN), HERE and Advanced Technologies — in four segments: mobile broadband and global services within NSN, Here, and Advanced Technologies.

Nokia will provide separate information for its devices business under the banner of discontinued operations, and details on the unit were not included in today's release.

Under the new reporting structure, Nokia has for the first time detailed what its Advanced Technologies unit — handling new technology R&D and intellectual property revenue — would have looked like had it always run as a single unit. Previously Nokia included its income from the businesses that will make up Advanced Technologies within its general devices and services numbers, but estimated that its annual run-rate for IPR income was around €500m.

In 2012 though, it would have earned €534m and, with operating costs and expenses running to €206m, made a profit of €325m.

Nokia's Here business lost €301m off €1.1bn in net sales over the same period. The two new categories within NSN, mobile broadband and global services, would have been contributed €490m and €334m in net sales respectively, but NSN as a whole would have made a €795m loss.

For the first three quarters of 2013, Advanced Technologies has earned €409m in net sales, according to Nokia, making it the most lucrative of its remaining businesses, based on profits as a share of net sales. For example, in Q3 2013, the unit's €83m operating profit was 59 percent of net sales of €140m, compared to NSN, whose operating profit for the quarter of €166m was six percent of €2.5bn in net sales. 

In future, Nokia's biggest business by revenue will be NSN, which for the past couple of years has accounted for around a half of overall revenues.

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Topics: Nokia, EU

Liam Tung

About Liam Tung

Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, security and telecommunications journalist with ZDNet Australia. These days Liam is a full time freelance technology journalist who writes for several publications.

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5 comments
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  • Acquisition

    Microsoft should have acquired Nokia entirely, instead of just mobile piece. Very smart people and some interesting projects outside of just mobile.
    Sean Foley
  • Not entirely true.

    To say that this reveals how it would have looked if devices unit never existed forgets one thing - had Nokia not had all that phone revenue from being the number one selling phone manufacture in the world in their heyday, would the other divisions even exist? Would they have the patents to license that they do?

    Looking at it another way, would the remaining division of Nokia be much, much larger then they are now, seeing that they would have been Nokia's primary focus from the begining?
    William.Farrel
    • hind sight is wonderful

      Navteq could be said to bigger but being on Nokia phones also funded
      and pushed its expansion. So you could argue that Navteq could easily have been
      taken over by google in many ways.

      There are some intrinsic brands that have and always will have value and Nokia is
      one of those regardless of market share. just like IBM today.

      Nokia is not your normal tech company and has a history of reinventing itself...
      if we were talking google or apple I would be concerned. imho
      whatsa2
  • If the devices unit had never existed...

    ...Nokia wouldn't have as many patents to enforce.
    John L. Ries
  • Oops

    Subtracting this out shines too much light on the disaster Windows Phone has been.
    symbolset