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Nokia 'could' put handset business up for sale
 
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Nokia "not prepared" for smartphone onslaught; could sell its handset business

Posted By Martyn Warwick , 30 November 2009 | 2 Comments | (2)
Tags: mobile Mobile Internet Finance

Nokia's director of strategy, Anssi Vanjoki, admits that the Finnish company was ill-prepared for the sustained and undeniably successful attack on its commanding position by the likes of Apple, Google and RIM and "does not rule out" the sale of its handset business at some time in the future. Martyn Warwick reports.

In an interview published this morning in the German magazine Wirtschaftwoche, Mr. Vanjoki, who is also Nokia's head of marketing, admits too that his company needs to work harder to improve its mobile Internet products if it is to to stay in contention with the likes of Apple, Google and Research in Motion - the manufacturer of the increasingly popular Blackberry PDAs.

The bombshell admission comes as some analysts claim that Q3 figures show Apple has knocked Nokia off the top spot to become the world's most profitable handset vendor. Others though claim that Nokia is still up there at the top of the greasy pole and that, in due course, figures for Q4 will provide confirmation that it remains the world's Number One global cellphone maker - in all respects.

Nonetheless, this begs the question as to why a man as senior as Anssi Vankjoki would tell the press that he "does not exclude" the selling off of the jewel in Nokia's crown at some unspecified date in the future. It is also evident that the head of strategy is not a loose cannon and did not make his "on the record" remarks off-the-cuff or without the knowledge of the Nokia board.

So, what's going on? Well, Nokia has taken a hard knock. Hitherto, the company was seemingly impregnable up there in its Nordic stronghold, but times are changing.


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(1) 30 November 2009 19:48:47 by Francis McInerney

I am delighted to have called this one so early. As I advised my clients on April 3, 2006:

"Nokia raised its forecast for the cellphone market it leads, but in doing so has raised questions about its operations. My North River Soccer Ball Metrics show a critical slippage in both Nokia''s Velocity of Cash and its Velocity of Capital.

"These slippages make Nokia what Michael Dell calls a "pool of cash" ready for someone to exploit -- read suck dry.

"North River Soccer Ball Metrics show that normally no pool of cash can co-exist in a market dominated by a Soccer Ball.

"The Soccer Ball (so called because of the structure that emerges when companies thin out their days of sales in inventories and receivables, inflating a thin customer-facing surface) will inflate itself on the less efficient company''s operating free cash flow, killing a pool of cash like Nokia.

"Since Nokia''s competition is less efficient that itself, it continues to generate a Velocity of Capital so high that this outweighs its poor Velocity of Cash, giving the company an A- Soccer Ball Management Grade.

"A closer look shows that Nokia takes 60 days to turn a sale into cash, showing account management weaknesses, and has 18 days in inventory, up four from two years ago. This leaves the company wide open to attack from an outsider like Apple, a Soccer Ball with far more powerful operating fundamentals than Nokia''s.

"While Nokia ranks 14th in today''s Financial Times Global Brand Ranking and Apple 29th, Apple ranks 3rd in brand momentum and Nokia not at all. Next move Steve Jobs."

Well, Jobs took the move. Nokia was never able to compete with an integrated cloud computing revenue platform like iLife -- and its very short cash cycle -- on which Apple could introduce product after product with impunity and at prices of its own choosing.

There must be data on people who have left the iLife platform, say for a cheaper, cloudless Dell computer or Samsung phone, but these data so small that they are not worth the time they take to collect.

What is amazing is that even with three and a half years warning, Nokia management could do nothing.


(2) 01 December 2009 00:58:15 by Darius Jack

I joined Maemoo team developing apps for Nokia Internet Tablet.
I was really surprised Nokia not to finance Linux (Debian) developers.

Maemo support website for users of Nokia Internet Tablet - Internettablettalk,
is no more in operation.

Nokia tried hard to compete on US market
with Wimax N810.

Plans to acquire Navteq and Navteq''s maps
to offer mobile navigation were not based on real business data.
Maps were for free, routing was for fee.
As any basic GPS car navigation comes at $100
both with routing and maps, it was not a good idea to come with mobile product financing MNOs, charging for data transfer.

Symbian by Nokia is not open system.
Symbian is a local system.

With competitors like Apple, HTC, Samsung, Nokia should concentrate itself on few products to be developed as global buzzwords, than developing hundreds of models of mobile phones, each coming with more hardware plastic parts, killing Nokia service.

Nokia management is not open to the global challenges.

I was so lucky to contact COB at Nokia and offer virtual keyboard solution for mobile phones by Nokia.

Today Nokia is coming with series of $30 mobile phones.

In my opinion, global standard in mobile worlds is smart phones coming with WiFi + HSPA
5 Mpx camera and more nice features in $500 price range.

I advised Nokia to develop touch screens
and Nokia staff member responded that due to local weather conditions Nokia was not interested in fingered operation during winter time.

I was happy with Motorola A1000, iPhone Touch, Nokia 5110, Motorola V3.

Latest smart phones by Samsung are slow,
so mayby next turn is HTC coming with 1Ghz processor.