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Print 34 comment(s) - last by YearOfTheDingo.. on Oct 31 at 6:08 AM

Nokia refocuses on NSN (telecom equipment), advanced technology, and mapping services as a leaner firm

Samsung Electronics Comp., Ltd. (KSC:005930) sold 85 million smartphones in Q3 2013, a bump of 20 percent, but it saw shipments of its flagship Galaxy S4 fall from 22 million (in Q2) to 18 million units (in Q3), according to analysts.  Apple, Inc. (AAPL) meanwhile, saw 33.8 million iPhones sold in Q3 (Apple's fiscal Q4 2013), down substantially from the 37.4 million units moved in Q2 (Apple's fiscal Q3 2013).

The sales of Nokia Oyj.'s (HEX:NOK1V) Devices Group -- now a subsidiary of Microsoft Corp. (MSFT) -- were just released in its quarterly earnings report.  The figures might seem a drop in the bucket comparatively, with 8.8 million units sold.  But that's substantially more than the 8 million units The Wall Street Journal predicted, and a bullish 19 percent growth over the 7.4 million Lumias Nokia moved in Q2 2013.  Nokia Devices also shipped 55.8 million feature phones in the Asha and other low-end series.

Overall smartphone sales were one driver that helped Nokia enjoy its fifth consecutive profitable quarter, evidence that the company's 2011-era woes are in the rear view mirror.  While a smaller company, critics may wish to reevaluate the performance of "Trojan horse" CEO Stephen Elop (now EVP of Microsoft's Devices Division).

The Nokia Group enjoys a health 3.8 percent operating margin and pulled in €5.6B ($7.7B USD) in revenue.  Operating profit (non-IFRS) was €215M ($296M USD), which was slashed by €97M ($133M USD) on restructuring charges, to settle at €115M ($158 USD).  The company saw an extremely small net loss per share with its restructuring charges (yet is still viewed as profitable due to its operating profitability) at -€0.02 per share (roughly -$0.0275 USD per share).

Out: Nokia Devices -- this profitable, growing unit transfers to Microsoft in Q4.

While this is Nokia's last quarter in charge of Nokia Devices (which will now transfer to Microsoft's balance sheet), it still has plenty to look forward to.  The Nokia Group leveraged the ($7.2B USD) Nokia Devices buyout by Microsoft to help pay off its €1.7B ($2.34B USD) buyout of Siemens AG's (ETR:SIE) share in Nokia Solutions and Networks (NSN).

While Nokia's devices brand and legacy will live on with Microsoft -- and by all signs is among the hottest growth properties in this sector -- Nokia Oyj. is turning its focus to the business of providing underlying phone network infrastructure via its now solely owned NSN subsidiary.  The telecommunications equipment market is not without its own fierce competition and ups and downs, but is generally less volatile and brand image sensitive than the consumer electronics market.

Nokia SiemensIn: Nokia Solutions Network (NSN) -- now solely owned by Nokia [Image Source: Telegraph]

NSN sales and profit were down in Q3 2013, but overall NSN has posted six profitable quarters and appears focused and stabilized.  With the Siemens and Microsoft transactions wrapping up Nokia is free to focus primarily on NSN and HERE (Nokia's location services) -- two key moneymakers that Nokia hopes to patiently grow.  NSN significantly downsized in 2011, laying off 17,000 workers, but that effort has helped the smaller company return to profitability in the telecommunications equipment market.

Finnish native Risto Siilasmaa, Nokia's chairman and interim CEO cheers:

Subject to the planned completion of the Microsoft transaction, Nokia will have three established businesses: NSN, HERE and Advanced Technologies.  Our strategy work is making good progress and it has already become clear that there are meaningful opportunities for all of our business areas: NSN, HERE and Advanced Technologies. In all of these businesses, we have strong assets that we continue to invest in for the long term benefit of our customers and shareholders.

Ristp Siilsmaa
Risto Siilsmaa, Nokia interim CEO and board chairman

Timo Ihamuotila, Nokia's CFO and Interim President, comments:

The third quarter was among the most transformative in our company's history. We became the full owner of NSN and we agreed on the sale of our handset operations to Microsoft, transactions which we believe will radically reshape the future of Nokia for the better. Subject to the completion of the Microsoft transaction, Nokia will have significantly improved earnings profile, strong financial position and a solid foundation from which to invest. We are pleased that NSN and HERE both generated solid profitability in what was a seasonally weak third quarter and at a time when we continue to make significant R&D investments into future growth opportunities.

The future looks bright for Nokia and shareholders have responded enthusiastically.  As, mentioned it's not all good news -- there have been layoffs and Nokia's balance sheet continues to be hit by the expense of these layoffs (referred to as "restructuring expenses").  But Nokia earned praise for its positively humane policy of offering laid off employees up to $30K in low-interest seed loans -- an unusual approach seldom seen in America's corporate world, where companies all too often look to squeeze every dime out of their beleagured workforce.

And Nokia's strategy as a leaner, more focused competitor has ultimately worked, and prevented a potentially much worse fate had it refused to downsize and tried to compete as a larger company against telecommunications and mobile device OEMs such as Samsung, ZTE Corp. (SHE:000063) (China), and Huawei Technologies Comp. (SHE:002502) (China).

Source: Nokia [PDF[



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By StevoLincolnite on 10/29/2013 10:39:25 PM , Rating: 2
I'm honestly expecting great things out of the Lumia range with Microsoft being vertically integrated with the hardware now.
Hopefully it means faster more feature-filled updates to Windows Phone.

Even eying off the Lumia Tablet to go along with my Lumia 920.

As for employee's getting 30k in low interest loans? If only every company could do that!
Thankfully here in Australia' it's not needed mainly due to having the highest minimum wage in the world, universal healthcare and lots of other benefits that goes with it so everyone has a relatively easy lifestyle, it's certainly stark contrast to the pittance minimum wage workers get in the USA with no other perks to go with it.




RE: .
By arazok on 10/29/2013 11:41:45 PM , Rating: 3
Serious? You spun a smartphone comment into a ra-ra socialism comment?

I dunno what they tell you in Australia, but America is hardly the land of the impoverished and has a pretty robust social safety net.

How about I ask an Aboriginal how they fancy life in Australia? I hear you guys treat them so well that they have the highest suicide rate in the world. Don't they know Australia is the best place in the world to live?


RE: .
By pandemonium on 10/30/2013 6:19:17 AM , Rating: 1
Did you actually read the article or are you just attacking someone while assuming they're nationally ignorant?

quote:
But Nokia earned praise for its positively humane policy of offering laid off employees up to $30K in low-interest seed loans -- an unusual approach seldom seen in America's corporate world, where companies all too often look to squeeze every dime out of their beleagured workforce.


Severance packages - of any form - aren't very abundant here in the U.S. for the usual employee not in upper management.

I think everyone knows pretty well that American companies are pretty ruthless when it comes to the bottom line and appeasing board members over their employees financial security when they're cut for downsizing.

I know these comments here are usually synonymous with anonymous rants of insecure adolescents, but this is kind-of ridiculous DT...


RE: .
By arazok on 10/30/2013 9:21:22 AM , Rating: 2
I read the article. How many Australian companies are doing the same thing? How many companies, anywhere, are doing this?

None. Or at least very very few. So why spin this into a lets bash America rant?

Hell, if Microsoft did this, they would probably be criticized for taking advantage of people in a bad situation by and indebting them to their former masters.


RE: .
By StevoLincolnite on 10/30/2013 5:53:00 PM , Rating: 1
You shouldn't really jump to conclusions, considering I never even mentioned America.


RE: .
By ironargonaut on 10/30/2013 8:51:53 PM , Rating: 2
you seriously bolded never. What an idiot.
quote:
the pittance minimum wage workers get in the USA with no other perks to go with it.

Last I checked USA and America are pretty much synonymous.


RE: .
By tayb on 10/30/13, Rating: -1
RE: .
By arazok on 10/30/2013 11:36:04 AM , Rating: 1
Your using the un definition of Poverty, which is completely flawed because it defines poverty as a relative and not absolute metric.

To be precise, UNICEF defines as living in a household that earns less than half of the national median.

You then apply that to the richest country in the world, and guess what, it does poorly. It’s impossible to do well on that metic unless you setup massive wealth redistribution. It’s not a measure of poverty, it’s a measure of income equality and it’s setup by socialists to encourage socialism.

By that definition you could have a country where everyone owns a minimum of one car and a 2 story house with a fully stocked fridge. But because a majority of people also own a yaught, you look at those who cannot afford it and call them impoverished.

Nobody in America starves. Nobody goes without heat. Everyone gets vaccinated. Everyone gets critical medical care if needed. What an awful place to live.


RE: .
By Rukkian on 10/30/2013 12:52:20 PM , Rating: 2
quote:
Nobody in America starves. Nobody goes without heat. Everyone gets vaccinated. Everyone gets critical medical care if needed. What an awful place to live.


Move out of your parents basement in the gated community, and you will see how ignorant your comments are. There are many places in this country where plenty of people starve, and do not have the money for vaccinations. Preventative care is not free at this point. Can you go to the ER if you need it and cant pay, sure, but that is not preventative. While there are some free clinics, they are typically overworked, and understaffed, and unable to handle all the requests.

As for poverty, the defination is more correct than you give it credit for. Anybody below the poverty level has a hard time getting by, they are not living comfortably. The reason you use the median income to figure out the number for poverty, is typically, the cost of living is higher where the median income is higher.


RE: .
By arazok on 10/30/2013 1:17:57 PM , Rating: 2
Show me evidence of these “plenty” of people starving. Anything. One link on the internet to prove this absurd claim of yours.

Not living as well as your neighbours is not poverty. It’s income inequality, and a whole separate discussion.

Getting preventative care is not a measure of poverty in any way. Poor people die from malnutrition or not getting medical treatment. Not from want of an xBox or prostate exams.

Reality gives the lie to the relative poverty measurment. The poorest 10 percent of Americans has a real income equal to or better than in most European countries. Americans in poverty have 1,230 square feet per household compared to 980 SF for the average of all European households, not just those in poverty.

It’s hilarious. You get all these snotty Europeans wagging their fingers at Americans about treating the poor better, yet the poor in America are better off than they are in Europe. This perception that the poor in America are harder done by is just that. A perception.


RE: .
By YearOfTheDingo on 10/30/2013 2:20:26 PM , Rating: 2
Well, if you define starving as eating too much, then there are plenty of people starving in America. The statistics are clear: there's a strong correlation between obesity and living in poverty.


RE: .
By arazok on 10/30/2013 2:41:05 PM , Rating: 2
Exactly. And by the OP’s logic, the solution to the obesity epidemic is to raise the minimum wage.


RE: .
By HVAC on 10/30/2013 2:45:36 PM , Rating: 2
The base problem is type of food (high carb/low fiber/high preservatives) that is pushed in industrialized countries mixed with lack of exercise. Obesity is a colossal consequence of a summation of a bunch of small decisions mixed with genetics rather than a goal of most people.


RE: .
By anactoraaron on 10/30/2013 3:56:12 PM , Rating: 2
quote:
Well, if you define starving as eating too much, then there are plenty of people starving in America. The statistics are clear: there's a strong correlation between obesity and living in poverty.


quote:
The base problem is type of food (high carb/low fiber/high preservatives) that is pushed in industrialized countries mixed with lack of exercise. Obesity is a colossal consequence of a summation of a bunch of small decisions mixed with genetics rather than a goal of most people.


Has anyone else noticed how much cheaper it is to eat unhealthy? You have to spend $2 or more to make a salad (at home) but you can still get a double cheeseburger for a buck (or if you want a salad from that same place you are spending $5).

So yeah, there is a correlation between obesity, diabetes, and other eating illnesses with poverty. Cheaper food is more unhealthy for you, and if you can't really afford to eat expect to be overweight, or worse, get diabetes.

But how the hell did we get to this subject on a Nokia tech article? :/


RE: .
By YearOfTheDingo on 10/31/2013 6:08:42 AM , Rating: 2
Has anyone noticed how it's 100% cheaper to eat one cheeseburger rather than two?


RE: .
By anactoraaron on 10/30/2013 4:06:22 PM , Rating: 2
quote:
Reality gives the lie to the relative poverty measurment. The poorest 10 percent of Americans has a real income equal to or better than in most European countries. Americans in poverty have 1,230 square feet per household compared to 980 SF for the average of all European households, not just those in poverty.


Living conditions vary based on space available, but anyone with half a brain could figure that out. Apparently you can't. Living space in European households is lower, just like the living space in New York is. So yeah, there's going to be a larger average here in America compared to anywhere in Europe. Apparently you don't get out too much.

"Real Income" is irrelevant, Income should be based on the cost of living. It's that tired, shit for brain argument that the poorest folks in America make 'X times' the amount of someone in Africa. No shit the poor here make more than the poor in Africa, but the cost of living is substantially more in America also.

And I lol'd at the "no one here starves" and "everyone can get healthcare here" comment you made. I remember seeing a 20/20 special about how the homeless were being put in taxi's and dumped a few blocks away when they were trying to get healthcare at a few hospitals. And people here do starve.

And that person's link is substantially more proof than you have presented for any of your painfully ignorant comments.


RE: .
By ironargonaut on 10/30/2013 4:42:55 PM , Rating: 1
Look up income spent on food as a percentage of total income then. Lets see US 6%, France 14%, and Kenya 45%. Yet, you expect me to believe that the cost of living in the US is putting food out of reach for people just because they are in the lower half of the population? That is a "shit for brain argument".
Oh, were the homeless actually sick or seeking a warm bed and meal at others expense. The people here who starve are the ones that are forcible locked in rooms. I'm not homeless and even I know that every day a different church or mission provides free meals in my area.
Shriners hospital all children treated for free. I provided a link, now you provide one for the "starving" people.
http://www.motherjones.com/blue-marble/2012/01/ame...


RE: .
By anactoraaron on 10/30/2013 8:54:34 PM , Rating: 2
Who's ass did you pull those figures from? According to a gallop poll from a year ago the average household spends $151 a week on food. That's $7,852 a year on food. The average household income for this year according to CNN money (DT won't let me post the link) is about $51,000. Simple math here. 7852/51000. You get 15.4% NOT your pulled straight outta your ass 6%.

Okay sure if you can get approved for care at Shriners your KIDS can get treated for free. What about the adults, moron/troll?

I'm done researching FACTS for you - that and simple math. Troll yourself the rest of the day.


RE: .
By arazok on 10/30/2013 5:22:06 PM , Rating: 2
quote:
And that person's link is substantially more proof than you have presented for any of your painfully ignorant comments.


Do you know WHY that link only compares 35 countries, and not all countries?

Because it compares median incomes. Which means if all the countries of the world were compared using the same metric, Ethiopia would show a 0% relative poverty rate (seeing that everyone there is poor), beating out every single country in the world for its progressive nature.

If that doesn’t expose the massive flaws in the measurement, I don’t know what will.

quote:
Living conditions vary based on space available, but anyone with half a brain could figure that out. Apparently you can't. Living space in European households is lower, just like the living space in New York is. So yeah, there's going to be a larger average here in America compared to anywhere in Europe. Apparently you don't get out too much.


It dosen't matter. When the poorest 10% of of the population (which is a very poor segment of any population) is living in a 1,200 sqft home, things can't be that bad for them. In the 1950's the average american lived in a 1,200 sqft home and we don't look back on the 1950's as the dark ages.

quote:
And people here do starve.


…No, they don’t. Believing it dosen’t make it true. I'm not going to justify such idiotic thinking with links to prove otherwise. You have google too.


RE: .
By anactoraaron on 10/30/2013 8:56:35 PM , Rating: 2
quote:
It dosen't matter. When the poorest 10% of of the population (which is a very poor segment of any population) is living in a 1,200 sqft home, things can't be that bad for them. In the 1950's the average american lived in a 1,200 sqft home and we don't look back on the 1950's as the dark ages.


Supply and demand economics don't matter to you? Troll, I think I'm done feeding you...


RE: .
By Reclaimer77 on 10/30/2013 9:09:46 PM , Rating: 2
You can't simply call someone a "troll" when they disprove your points or you don't see eye to eye.

"Poverty" in America is a relative term. Poverty here means owning a car, having an ample sized roof over your head, food and medical care. Sir, that is NOT poverty.

Income inequality and poverty are used as interchangeable terms, when they are quite separate.

America has problems, who doesn't. Seriously though, whenever America comes up in an Internet discussion, it's portrayed as the WORST country in the world in every way. That's goddamned ridiculous! YOU are the troll here, not him.


RE: .
By tayb on 10/30/2013 3:25:32 PM , Rating: 2
It seems as if you do not understand the difference between mean and median or how comparisons work. The study does not compare the median income in the United States to the median income in Romania it compared income in the United States to income in the United States then does this for every other country.

It absolutely is not flawed at all to look at the percentage of people in a country who earn less than half of the median because the median is not altered by huge incomes at the top. It's the middle hence the term median. If you live in a country where the median income is $50,000 you are absolutely in poverty if you make less than half of that income. The standard of living in a country with a median of $50,000 absolutely puts you in poverty.

It is as if you think the median income has absolutely no bearing on standard of living or affordability. As if someone earning less than $22,000 a year in the United States is not in poverty. Seriously???

quote:
Nobody in America starves. Nobody goes without heat. Everyone gets vaccinated. Everyone gets critical medical care if needed. What an awful place to live.


Do you live in your parents basement or something? Have you been outside to the real world. It's not very rosy out there. There are 47 million Americans living on food stamps because they can't afford to eat. There are 13 million living on welfare and another 6 million on unemployment insurance. The fact that we have a social safety net adds absolutely NOTHING to the discussion that America has a serious poverty problem. Take off the blinders.

The living wage calculations in almost every city in the country is 20-500% higher than the minimum wage, a wage that many millions of people make. It's actually incomprehensible that there are actually people out there who think the United States is some sort of utopia. Utopia of what, exactly? Wealth inequality, spying, and poverty? If you say so.


RE: .
By ironargonaut on 10/30/2013 8:27:15 PM , Rating: 2
http://www.motherjones.com/blue-marble/2012/01/ame...
Yes, it is absolutely flawed. If $22,000 can buy me food, and a roof over my head, free medical care (because you qualify for Medicaid) then no I'm not in poverty. There is no logical reason to believe that 1/2 half of the median for a country is poverty. And, by poverty I mean no roof and going hungry. Look at the census bureau numbers for Americans in "poverty" who own DVRs, and cellphones.
By the way your examples of food stamps just proves the quote is accurate. If you have food stamps you are by definition not starving.
Also, he is not denying poverty, he is denying starving, two different subjects, because poverty no longer equals starving.


RE: .
By StevoLincolnite on 10/30/2013 5:56:52 PM , Rating: 2
quote:
How about I ask an Aboriginal how they fancy life in Australia? I hear you guys treat them so well that they have the highest suicide rate in the world. Don't they know Australia is the best place in the world to live?


As a quarter-cast Aboriginal, substance abuse is the real problem, but that's the same problem that the Native Indians have in the USA.

Aboriginals get lots of perks, that other races in Australia don't receive, like housing, vehicles, you name it, it's just substance abuse from things like Alcohol that are destroying our culture and families which results in lower standards of living in all aspects.


RE: .
By ironargonaut on 10/30/2013 8:35:39 PM , Rating: 2
I personally believe "Aboriginals get lots of perks, that other races in Australia don't receive, like housing, vehicles, you name it" is the reason. Substance abuse is enhanced by the above. If you are told that you can't take care of yourself and the gov't shows that providing everything, what do you have to be proud of? When the gov't provides everything, to people do the arts and cultures thrive because now there is plenty of time for these? The more handouts a gov't provides the worse off the people are. Slowly, but surely other cultures will end up the same. Including mainstream, Australian and US. What's the point in working when everything is handed to you. What's the point in succeeding when if you do you will be vilified and taxed back down?


RE: .
By Alexvrb on 10/30/2013 12:26:23 AM , Rating: 1
"Free money for everyone! It comes from thin air!"

BRILLIANT! Why didn't I think of this!?


RE: .
By BZDTemp on 10/30/2013 7:05:09 AM , Rating: 2
I see you $16.37 an hour and pile on our $19 an hour plus 5-6 weeks yearly vacation with pay :-)

The $16.37 certainly isn't bad, but there are countries with higher minimum wages only they don't register in direct comparison due to differences in laws. Like here in Denmark there isn't law on minimum wage since almost every employer and employee is organized it is by ways of collective bargaining agreements and those not follow the agreements anyway.

Other factors is also relevant in such comparisons and one is the amount of hours worked yearly. The OECD list those as US=1790, Australia=1728, Denmark=1546 and the Netherlands=1381.


RE: .
By theapparition on 10/30/2013 1:19:01 PM , Rating: 2
Yes, but also why the cost of living is through the roof. There's a reason my Australian friends come to the US with empty suitcases.


RE: .
By StevoLincolnite on 10/30/2013 6:06:39 PM , Rating: 2
Cost of living is higher, but...
Australian workers get four weeks' annual vacation, retirement benefits, and full health insurance and other perks, which kinda' evens that disparity out, heck I even got free college education.

But it's still very easy to survive even on minimum wage whilst flipping burgers in Australia. - In the USA people will struggle.

The average wage is higher too. - In fact, if you are on minimum wage, you still have every bit of chance to do the Australian dream as someone who is on the average wage.

Conversely, the minimum wage is increased every single year, it's only happened 3 times in the last decade and half in the USA, hasn't it?

And, we are the only wealthy economy not to go into recession, so we must do something right.


RE: .
By ironargonaut on 10/30/2013 8:46:56 PM , Rating: 2
I've heard how long the wait for healthcare is in Australia is. I've heard of the hospitals that are so great they have bare bulbs hanging from the ceilings for lights. How your EPA plants "kerosene" bushes as green ways then blames global warming for massive fires. If it is very easy to live on minimum wage, plus you get great perks, why bother getting a college education? Seems like your the dumb one. Everyone else goes out drinking beer and living carefree while you study for four years just to be taxed more. And,your standard of living is still below US.
http://www.australiaonnet.com/economy-business/sta...


I wouldn't praise Elop
By bug77 on 10/30/2013 4:42:22 AM , Rating: 1
Ok, Nokia made a couple hundred million, but remember Microsoft gave them a couple billion when their partnership started. I bet I could have made that profit if someone gave me that much money to begin with. Hell, I could have kept that in some banks and make that money on interest.




RE: I wouldn't praise Elop
By crispbp04 on 10/30/2013 9:11:47 AM , Rating: 3
Your investment IQ is 0. Stick to your day job, whatever that is...


Positively humane--huh?
By YearOfTheDingo on 10/30/2013 7:46:41 AM , Rating: 2
Somehow I doubt the people getting these loans see themselves as beneficiaries of an act of pity. Basically, Nokia is offering their former employees a chance to continue promising projects that the firm itself stopped pursuing. Although Nokia does not take a ownership stake in the start-ups, there's a good chance that the technologies involves Nokia IP. The company would capture some of the upside should one of them turned out to be a breakthrough. It suits Nokia's interest too that people with inside knowledge don't bolt immediately to competitors.




One important bit of info missing
By troysavary on 10/30/2013 9:22:31 AM , Rating: 2
Nokia is up 400% over same quarter last year in America. I expect sales to grow even more with the tablet and the 1530 just released.




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