Can New Nokia Fill The Gap Left By Old Nokia?

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BLOG: Nokia’s strong results, pending merger with Alcatel-Lucent and return to the smartphone market suggest it feels freed by handset sale two years ago

Back in 2013, Nokia’s decision to sell its devices and services unit for £4.6 billion felt like the end of an era.

The iconic Finnish manufacturer, once so influential and successful in the mobile market, its name synonymous with quality and innovation, appeared to have been subjected to a final humiliation.

With the handset business on which it built its reputation now in the hands of Microsoft and its then CEO Steve Ballmer, Nokia was left with its networking business, HERE Maps and its advanced technology divisions.

Nokia return

Nokia Espoo HQBut while mobile phones grab the headlines, the fact remained that at the time of the sale, networks generated 45 percent of Nokia’s revenue. Fast forward two years and Nokia is in rude health.

Buoyed by strong quarterly results and the £2 billion sale of its HERE maps unit (we’ll gloss over the fact it spent £5.5bn for Navteq in 2008), the revitalised firm is set to complete a merger with French rival Alcatel-Lucent and return to the smartphone market.

Free of the shackles that direct manufacturing and Windows Phone placed upon it, Nokia plans to create designs for smartphones and licence them to third party manufacturers. It is entirely possible we could see the famous Nokia name return to the hardware market as early as next year.

With investments in 5G, the commercialisation of VR cameras and the possibility of Nokia design once again gracing the mobile arena, the ‘new’ Nokia is more interesting and doing much better than the one that joined Microsoft.

Windows Phone appears to be on its last legs as new CEO Satya Nadella looks towards Windows 10, while the company has written off £4.9 billion worth of assets related to the Nokia purchase – more than the actual transaction. Job cuts are likely, and Stephen Elop, the man who engineered Nokia’s relationship with Redmond, has been shown the door.

The decline of Nokia, once a source of pride and prosperity in Finland, has hit the country hard and any more job cuts or closures will be keenly felt. Microsoft has shut down a plant in Salo and there are fears more redundancies will be made at sites in Espoo and Tampere.

Nokia’s demise has at least allowed the country’s tech startup scene to flourish, with companies like Jolla hoping to make an impact, but this will be of little consolation to the long-term unemployed. However there is now a little more hope that the ‘new’ Nokia might be able to partially fill the gap left by the old one.

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