Nokia Unloads Headquarters for $222.5M USD
December 4, 2012 4:49 PM
comment(s) - last by
Move raises much needed capital, allowing Nokia to continue its Windows Phone 8 push
Nokia Oyj. (
) announced on Tuesday that it had
at last located
buyer for its gleaming Finnish headquarters
. Mired in
, Nokia has been selling off assets --
including some of its patents
-- to help it sustain its
Windows Phone 8 push
as it downsizes
and attempts a turnaround.
Interestingly, while Nokia sold its headquarters for €170M ($222.5M USD) to Exilion in a deal to be closed by the end of the year, it's also going to stay in the headquarters on a "long-term" lease deal. In that regard the move is similar to Ford Motor Comp.'s (
) decision pre-recession to re-mortgage most of its North American properties, a move that gave it capital needed to weather the recent recession and become the only member of America's Big Three automakers
to enter government-guided bankruptcy.
Nokia's CFO Timo Ihamuotila remarks on the deal, "We had a comprehensive sales process with both Finnish and foreign investors and we are very pleased with this outcome. As we have said before, owning real estate is not part of Nokia's core business and when good opportunities arise we are willing to exit these types of non-core assets. We are naturally continuing to operate in our head office building on a long-term basis."
Nokia's headquarters building is for sale. [Image Source: Reuters/Benjamin Suomela/Lehtikuva]
The decision to release the headquarters is also interesting as some had speculated Nokia might look to shift more of its management to North America, to be closer to ally Microsoft Corp. (
). However, it appears that for now Nokia is holding tight to its Finnish roots, even as it trims its workforce.
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RE: In the long run
12/5/2012 5:09:56 AM
Your crazy pre Elop they sold about 100 million smartphones a year that's when they had virtually no presence or was visible in the US at all, their sales are down by more then 75% as far as smartphones go and combined mobile device ASP is way down.
They are relabeling Series 40 touch phones as smartphones to cover up their strategic mistake. It's a line / OS that should have been phased out. It's all they got when they need something for mainstream and feature phone replacements though.
Microsoft pays Nokia about 250 million USD per quarter, but Nokia also has to pay royalties/licenses per phone and also gives away Navteq and Nokia maps data, and resources to Microsoft and it's competitors.
Nokia's Nokia Siemens Networks now has to transfer cash to Nokia proper when it was covering for NSN's losses with the profits of the mobile division before. Revenue is already half was it was two years ago.
Nokia with Elop is no Nokia at all, my Finnish neighbors have seem to have got it now. They are moving on. Nokia have closed one of the only remaining mobile manufacturing plants and R&D site in a high-wage country now which was their strength, it's all low-wage and contract manufacturing from now on with no insights into their own supply chain. Why would I buy a Compal designed Nokia Lumia 800 over a HTC build? Remember this was a company of about 60 000 people with more then half of that working with production and assembly when Elop was taking over. Every asset Nokia had is already sold off to others or just legacy costs in manufacturing plants that they won't sell as running plants, just close down.
Windows Phone might now be where it should have been from the start but nobody not even the most positive and evangelist analyst projects anywhere near the volume needed to sustain Nokia. Nokia would need to be smaller than Motorola Mobility maybe even RIM in order to survive on Microsoft products. Provided they truly succeed. Microsoft should have paid about 15-20 Billion Euro for them if they wished to buy a brand name and dismantle a company to promote their own software. Finland loses billions every year thanks to this. Nokia won't have a work force period, this was about downsizing a then profitable company to kill the competition from Symbian and MeeGo/Maemo and in extension Europe.
Nokia has lost about 4 billion EUR just the first three quarters of 2012. Microsoft simply doesn't pay for lighting the company on fire and firing tens of thousands of workers. This from a company who's smartphone sales grew every year/quarter before Elop became CEO. A business that they are virtually out of today. This is something that is done in North America to companies but usually not before multi billion dollar losses and restructuring attempts.
RE: In the long run
12/5/2012 1:53:41 PM
Cool, but all that was before the new lumia launch, which is what I was basing my new view on.
RE: In the long run
12/11/2012 10:35:23 AM
I'd say they still loose money and is turning into nothing. They still have a few tens of thousands of workers to lay off. It does pay off for Microsoft but that is a whole other matter. You can't base your views on a platform which never will be big enough to sustain this brands business. Without looking at any facts not even taking into account the most positive outcome of WP market share. It won't sell hundreds of millions of devices and they still have competition in the WP8 field from players like HTC which still have navigation sponsored by Nokia through Microsoft. They still doesn't sell anything in the US. Finland certainly lost billions, it even lowered their GDP. Single track doesn't work here, and they should obviously have waited for WP8 before saying anything about any change in offerings. It obviously is gonna be a small platform and there is no porting of Android apps like on new devices from RIM here. Sales won't increase to tens of millions of devices in Q4.
It has a long way even to reach a market share of 5% with Nokia only having a small part of that to begin with. Doubling the Q3 sales at Nokia wouldn't do anything to put them into black. It's a long way after the smartphone sales of a small player like HTC. They won't make it into the top five suppliers of smart phones next year, and even that top them can hardly support 15 000 employees. Who cares about a future Nokia of a few thousand employees with contract manufactured Qualcomm-designed phones serving as a for Microsoft? Not even WP8 buyers I can almost guarantee. They have no growth to look forward to and will have nobody to innovate anything. They will not have the competence to build mobile os's or design hardware and they certainly won't have any advantage over other competitors. It will take so much time for them to establish themselves with WP8 so everybody will have moved on.
"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997
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