The deal hasn’t closed yet, but investors are already approving or penalizing
of Nokia devices, depending on the company. Microsoft shares opened
down 5.2 percent to $31.75. In the meantime, earlier today, Nokia shares opened at €4.36. Compared to yesterday’s closing price of €2.96, it represents a whopping 47 percent increase. Now trading at €4.14, the stock price remains strong.
Why do Nokia investors appreciate the deal so much?
As Nokia frames it, the company got rid of its failing business while keeping all the good parts — the NSN telecom infrastructure division, the HERE map division and patents. Moreover, Microsoft will give $7.1 billion in cash to handle a money-losing division, license patents and the Nokia brand. Professor of Organizational Studies at the University of Sydney Business School, David Grant, said moving the handset division to Microsoft was ‘‘an important development, but both of them independently have been battling to produce products that satisfy consumer needs.’’‘‘It could work in their favour, but one has to ask whether consumers have lost confidence and they are so far behind that can’t make up.’’ Nokia has kept its mobile broadband business, NSN, and research arm Advanced Technologies and will remain in Finland. Global sales for the second quarter of 2013 show Nokia sits second, selling 61 million handsets, according to Gartner. However, most of those sales were low-cost units sold in developing countries. Samsung and Apple dominate the smartphone market, selling 71.4 million and 32 million handsets respectively in the quarter.
As Nokia frames it, the company got rid of its failing business while keeping all the good parts — the NSN telecom infrastructure division, the HERE map division and patents. Moreover, Microsoft will give $7.1 billion in cash to handle a money-losing division, license patents and the Nokia brand. Professor of Organizational Studies at the University of Sydney Business School, David Grant, said moving the handset division to Microsoft was ‘‘an important development, but both of them independently have been battling to produce products that satisfy consumer needs.’’‘‘It could work in their favour, but one has to ask whether consumers have lost confidence and they are so far behind that can’t make up.’’ Nokia has kept its mobile broadband business, NSN, and research arm Advanced Technologies and will remain in Finland. Global sales for the second quarter of 2013 show Nokia sits second, selling 61 million handsets, according to Gartner. However, most of those sales were low-cost units sold in developing countries. Samsung and Apple dominate the smartphone market, selling 71.4 million and 32 million handsets respectively in the quarter.
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