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How Nokia is reinventing itself for the better

by , 29 November 2013

Stephen Elop, Nokia's ex-CEO, said the decision to sell phone division to Microsoft was not easy to make.

But it had to happen.

You see, Nokia was once the world's largest mobile phone producer.

But it fell very far behind its competitors.

And so it had to reinvent itself in order to stay afloat.

The deal with Microsoft will become final in early 2014.

And then Nokia will be out of the mobile phone business…

Let's take a look at what's next for Nokia.
 
Nokia has a long history of reinventing itself
Nokia’s come a long way since it started out. 
 
It began in pulp, in 1865. Then it switched into power generation. 
 
Then to rubber goods, cables and televisions.
 
Then its consumer-electronics division fizzled out and they eventually sold it in the 1990s. 
 
Nokia’s next big thing was mobile phones. 
 
And now it’s said goodbye to that too… 
 
So what’s next? 
 
The face of the new and improved Nokia
Thanks to the proceeds of the sale of the phone division to Microsoft, plus €1.65 billion from a ten-year patent-licensing deal and a €1.5 billion loan, Nokia’s balance sheet is looking stronger. 
 
They have plenty of cash to finance a fresh start. 
 
And Nokia’s share price has doubled to nearly €6 since they made the announcement.
 
The new Nokia will have three divisions, the biggest of which will be biggest will be Nokia Solutions and Networks (NSN). 
 
This division sells equipment, software and services to telecoms operators. 
 
The other two divisions will be HERE and Advanced Technologies. 
 
HERE is Nokia’s maps division. It has most of the market share for navigation systems built into cars.
 
Advanced Technologies is Nokia’s “innovation engine” as their chairman, Risto Siilasmaa, puts it. 
 
It will have the job of licensing Nokia’s thousands of patents and coming up with more bright ideas to take the company into a new era. 
 
Should I buy into Nokia now?
Wait for things to settle down and for Nokia to choose a new CEO and finalise their new structure before you consider investing in them.
 
And to see how well their “innovation engine” fires. 
 
But for an innovative company that’s gone from pulp to handsets to telecoms equipment, maps and patent licensing, no challenge seems too great. 
 
So keep your eye on Nokia to see what they come up with next.


How Nokia is reinventing itself for the better
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