It has been quite a week that has passed. We were given a glimpse into the future by Elon Musk with his dreams of holographic design, Samsung surprised us all with the seemingly overpriced Samsung Galaxy Gear, Xiaomi showed that they mean business with the Xiaomi Mi3, Google and Nestle introduced Android 4.4 KitKat and then of course a hot topic was Microsoft’s announcement that they were acquiring Nokia’s mobile division.
This week the end of an era came to be, in the very near future, Nokia would be no more. Microsoft and Nokia together announced this week that Microsoft will be acquiring Nokia’s mobile devices unit and licensing the firm’s remaining patents in a deal totaling an excess of $7.2 billion. After the deal closes by the beginning of 2014, we are unlikely to see new Nokia branded devices ever again, despite Microsoft being granted the trademark on feature phones for a period of ten years.
Nokia however, remains, stronger than ever, but empty, and to many, soulless. For plenty of years Nokia lead the mobile revolution, many of people’s first phones were made by Nokia, but that legacy now seems to be gone. Nokia’s brilliant camera phones, sturdy and strong smartphones, long lasting feature phones; all gone. Yes, the devices will be made by the same people, in the same factories, but that once iconic logo will be no more. Nokia phones no more.
What many people seems to be asking however is, what’s next for Nokia? What happens to the remainder of the company? What happens to the world class mapping services? What happens to the industry leading networking company? What happens to all of the patents that the company still owns, but can’t really make use of themselves? What happens to the brand that connected people, some for the first time? What does the future hold for the deviceless Nokia?
Nokia, as a brand, remains. They may not be in the mobile hardware business anymore, but they are still there, and they may very well be stronger than ever. The Microsoft deal stipulates that the remaining Nokia cannot make a single mobile device carrying the Nokia logo until January 1, 2016. So, can they re-enter the mobile market after that, if they wish? Yes, they can, but they are more than likely not going to do so. The company has shifted focus, its days of struggling in the competitive mobile market is over and they are getting a big fat paycheck to prove that. Sure, some of the money is likely to be paid to shareholders as a nice little bonus for their investment, but there will be quite a bit remaining.
The company will focus on two core efforts; mapping services through NAVTEQ and building world class networks through Nokia Networks. NAVTEQ is indeed one of the world’s best mapping services, so good in fact that it powers Garmin’s GPS systems, it also powers Yahoo! Maps, Bing Maps and of course Nokia’s HERE maps. The remaining Nokia will finally bring its HERE maps to Android, iOS and other platforms through dedicated applications. In some aspects, it will continue to compete with Google, especially through mapping services. HERE is an extraordinary offering that may very well win. Then there’s the networking division.
Nokia announced a while back that it would be acquiring Siemens’ stake in their Nokia Siemens Networks joint venture, with that in mind, it is likely that NSN is renamed to Nokia Networks, one of Huawei and Alcatel’s main networking competitors. Nokia Networks builds some of the world’s key mobile networks and similar IT infrastructure and with more focus on that effort, and the fact that Huawei’s being investigated for spying, Nokia Networks may very well become one of the largest players in the field, turning a hefty profit.
Then there is one more possibility floating around. That Nokia acquires fellow Finnish mobile maker, Jolla Mobile, which is yet to ship its very first device. Jolla, which was founded mainly by ex-Nokia employees, aims to become a market leader with their Sailfish OS, based on Nokia’s earlier MeeGo offering which was killed off in favour of Windows Phone, despite being praised by consumers as well as the media and other critics. In fact, if Nokia does acquire Jolla, they can continue their efforts into the mobile market, under a new name until 2016 when they can once again use their own trademark.
Nokia, with Jolla, can enter the niche mobile market, selling only to corporate clients and consumers that are more than willing to acquire the devices. Think of it as the poor man’s Vertu. The Nokia name lives on, making sturdy, easy to use devices that carry on a legacy of expert craftsmanship and premium design, in other words, if you want a Nokia device, you can get one. A modern Nokia 3310 if you’d like to call it that, but that part is highly unlikely.
The fact of the matter remains that Nokia will need a new source of revenue, a strong source that will keep them profitable, that will keep steady growth and most of all that will keep shareholders happy. NAVTEQ and Nokia Networks alone can do this, but it will take some careful planning and hard work by their new leaders. No one really heard of Motorola again after Google acquired their mobile division, will the same happen to Nokia?
Can Nokia’s remaining patents generate enough annual licensing fees to keep the company from falling apart? Will Huawei, Ericsson, Alcatel or any of the other big name networking companies eat the remaining Nokia alive? Will Google or Apple or even Yahoo or Garmin acquire the remaining Nokia for their superior mapping services?
Only time will truly tell, but time is running out and industries are moving fast…
To the old Nokia, we love you and we forever will, thank you for the great devices such as the Nokia 5110, 3210, 3310, 1110 and so many more. Thank you for the superb camera phones. Thank you for games such as Snake and Bounce, but most of all thank you for the years of excellent devices. We hope that your efforts will continue at Microsoft… Goodbye…