The once-staid Finnish company confirmed that it had completed the sale of substantially its entire devices and services business to Microsoft. Microsoft said the unit, now named Microsoft Mobile Oy, would fall under its devices group.
"Today is an exciting day as we join the Microsoft family, and take the first, yet important, step in our long-term journey," said Stephen Elop, the former CEO of Nokia and the new head of devices at Microsoft, in a blog post.
Microsoft's $7.5 billion acquisition is a sobering reminder that even the strongest companies can fall.
Next to Motorola, which invented the mobile handset, there was no bigger name in the business than Nokia. The company has been on such a steady downward slide over the past six years that it's easy to forget how dominant and long-lasting its reign was over the cellphone business. Samsung Electronics is heralded as a titan with just over a quarter of the global handset market today; Nokia at its peak in 2007 controlled 41 percent of the market.
"It's hard to imagine any vendor reaching 41 percent share in today's world," said Ken Hyers, an analyst with Strategy Analytics.
By the end of last year, Nokia's market share still sat at 15 percent, thanks to a horde of cheaper basic phones, according to data compiled by Strategy Analytics. Its share of the smartphone market was in the low single-digits.
But when Nokia was on top, nobody could touch it. That kind of success eventually bred an obstinate attitude and vulnerability that was exposed first by the Motorola Razr, and then more fully by Apple's iPhone.
The cellphone industry was highly fragmented with multiple vendors who looked at the market on a country-by-country basis. Nokia was one of the first to view the global market as a whole, building phones that worked in many countries at once. But at the same time, it recognized the importance of reaching every price tier. It established a strong presence in high-end Western markets, and saw one of its phone featured in films such as "The Matrix." It played well to audiences in emerging markets such as India, where phones would sold for as little as $40.
In 1998, Nokia overthrew Motorola to become the world's largest phone manufacturer. By the time I purchased the 5190 in a year later, Nokia supplied a little more than one out of every four phones in the market.
"Nokia was to mobile as Kleenex was to tissue paper," Hyers said. "That was how dominant they were."
Former Nokia vet Soderling said she started feeling emotional today when her Facebook stream started filling with pictures of the glowing blue Nokia sign being taken down at the Espoo, Finland, headquarters, replaced with a white Microsoft logo.
That Nokia could fall so low serves as a lesson to all handset vendors. As dominant as Samsung and Apple are, Nokia was even bigger in its prime.
source : CNET
