It looks like Stephen Elop’s und Steve Ballmer’s idea to take over the mobile phone branch of Nokia in order to bring MS-Windows as mobile operating system on the success road has failed and will be stopped now.
For the mobile phone branch that is now part of Microsoft, Microsoft-CEO Satya Nadella announced, that billions are deprecated and up to 18000 employees will be layed off. This will be more than half of the remaining former Nokia-employees, but also other parts of Microsoft will experience major lay offs. As an irony these layoffs will also include Stephen Elop.
On the other hand it looks like Nokia will get into mobile phone development again. The deal with Microsoft forbids that for a certain time, but that will end in 2016. Some expect that Jolla might be bought by Nokia in the future. Nokia will become a niche supplier, not more. The market leading position they had before Elop will not be regained and it is also unlikely that they become one of several major suppliers, which might have been a reasonable outcome without Elop. Their own production won’t come back to Finland, but will be given to the well known Asian manufacturing companies.
Such fusions and takeovers of departments always have their challenges. Company cultures tend to be incompatible and markets are used to a brand and will not easily switch to the new supplier. Taking over of Pentax by Ricoh has been relatively successful, as it seems, but in that case they have carefully worked on mainting the brand in an area where consumers are kind of sticky to their traditional brand. Microsoft did not go that road, but they deliberately changed a lot and thus lost customers who might have been loyal to the Nokia-brand. The strategy in these two takeovers was completely different.
Probably Steve Ballmer and Stephen Elop will be remembered as incapable managers for a long time, for first destroying Nokias core business and then losing billions on the takeover that was obviously the original intention behind the whole game.
Links:
- Forbes
- ZDNet
- Walll Street Journal
- Engadget
- PC-World
- CNN
- Geek Wire
- RT
- Fortune
- Gigaom
- CNet
- Time Magazine
- My 2015 April Joke Posting
- Wired
- Reuters
- Mashable
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