It is the 9th anniversary of Nokia’s D&S department sale to Microsoft
Time is linear, but when I remember the great sale of Nokia’s Devices and Services department, linearity becomes a relative term. It feels like yesterday, but it happened in 2013. On this very day, Nokia announced early in the morning that the Devices and Services division, which was responsible for almost everything Nokia was doing at the time, was being sold to Microsoft. The price was set at 3.79 billion euros, but if you add a 10-year patent license, the final price is 5.44 billion euros. This seems like a small amount, as the D&S business brought in revenues of some 10.7 billion euros, but we must remember that this business gobbled up money. That year alone, Nokia reported an operating loss of 590 euros for the department, which facilitated the decision to sell it.
This event had a huge impact on the smartphone industry, but even bigger on Finland and its technology sector. About 42,000 people were employed at D&S, and many of them were laid off in the months and years that followed.
After the sale, Nokia focused entirely on networks and licensing, while Microsoft tried to become a smartphone manufacturer, but failed thoroughly. The following year, Nokia regained hope for a return to the smartphone market with the launch of the Nokia N1 tablet, but the real return came in 2016 when HMD Global licensed the Nokia brand for feature phones, smartphones and tablets. In the same year, Microsoft sold its Nokia featurephone business to the young startup backed by FIH for 350 million euros which marked the start of Nokia’s phone brand revival.
The rise and fall of Nokia had a big echo in the business world, and if you want to learn more about it, I recommend reading books like “Operation Elop” which is available free online and Nokia Chairman’s “Paranoid Optimist” which you buy get online. Many websites and blogs have reported on this, so a good Internet search should also yield a lot of information about what was going on.
Do check Nokia’s (Archive) and Microsoft’s (Still online) press releases from that day, and also look at Microsoft’s presentation explaining why they purchased the D&S business and what they expected to achieve in the following 5 years. Microsoft has some really bad predictions…