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With the Devices and Services division gone, Nokia can focus on three core units

Microsoft announced its decision to purchase Nokia’s Devices and Services division for just over $7 billion back in September 2013, and the deal was finalized this past Friday. However, Nokia’s latest earnings report shows that Microsoft definitely has a fixer-upper when it comes to Nokia’s hardware prospects.
 
Nokia’s phone unit saw sales fall by 30 percent from $3.83 billion in Q1 2013 to $2.67 billion in Q1 2014. In addition, the operating loss for the division widened from $101 million one year ago to $424 million for Q1 2014.
 
As for the reason for the declines:
 
On both a year-on-year and sequential basis, our Mobile Phones net sales were affected by competitive industry dynamics, including intense smartphone competition at increasingly lower price points and intense competition at the low end of our product portfolio. Our Smart Devices net sales were affected by competitive industry dynamics including the strong momentum of competing smartphone platforms.
 
Translation: Its budget phones sales continue to dwindle, while Android and iOS competition is leading to sales erosion in the high-end smartphone market.
 

But even with the downward spiral of its [now sold] devices business, Nokia is still a healthy company, posting overall profit of $335 million for the quarter. The company can attribute its strength to its Technologies (patent licensing) division that brought in $119.2 million, HERE maps division that brought in $13.86 million, and, from its Nokia Solutions and Networks division that brought in $299.4 million.
 
The company also has $2.91 billion dollars in cash.
 
With the Devices division now jettisoned, Nokia’s new President and CEO, Rajeev Suri, can build his company around these profitable units.

Rajeev Suri 

"The world of technology is on the verge of a change that we believe will be as profound as the creation of the internet," said Suri. "With our three strong businesses - Networks, HERE and Technologies - and position as one of the world's largest software companies, we are well placed to meet our goal to be a leader in the technologies for a world where everybody and everything is connected."
 
"Our goal is to optimize the company so that each business is best enabled to meet its goals. Where it makes sense to do so, we will pursue shared opportunities between the businesses, but not at the expense of focus and discipline in each."

Sources: Nokia [1] [PDF], [2]





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