Nokia Is Going Down!

It’s official, Nokia is going down. The one time telecom giant, who had its reputed products spread over 50 countries, has announced a cut of 10,000 jobs, and a shutdown of 3 facilities, by the end of 2013.



The Finnish Telecom Manufacturers three senior executives will also be departing from the company. The closing facilities include a research center, a factory in Germany, Canada and in its home land Finland.

The company had issued a warning to investors that its loss was likely to be greater in the second quarter of this year. It had posted a loss of $1.2 billion in the first quarter of 2012. Nokia also said the negative effects of its transition to a Windows-based Smartphone business would continue into the third quarter.

Once an undisputed leader in the mobile phone market, Nokia lose its charm over the years to Apple, Samsung and other handset makers based on Android.

The company, which announced its partnership with Microsoft in 2011 for making a range of Windows based Smartphones has since then saw a steep decline of sales and profit loss, mainly due to people and operators avoiding Nokia’s own Symbian based devices.
Nokia also announced the sale of its luxury handset business, Vertu to a European firm. With its streamlining efforts, the company is planning to save €1.6 billion by the end of 2013.

“These planned reductions are a difficult consequence of the intended actions we believe we must take to ensure Nokia’s long-term competitive strength,” said Stephen Elop, the Nokia chief executive and a former Microsoft executive. “We do not make plans that may impact our employees lightly, and as a company we will work tirelessly to ensure that those at risk are offered the support, options and advice necessary to find new opportunities.”

Last week, rumors about a Microsoft takeover had made Nokia’s sinking shares rose six percent.

 
“The cost savings and job cuts were intended to return Nokia to profitability “as soon as possible,” Elop said.

Is Microsoft about to acquire Nokia?

Finnish telecom giant Nokia, considered among the most trusted brands in India, is going through a bad patch with its shares at an all-time low, triggering speculation that it may be acquired by Microsoft.

Once the most valuable companies in Europe, the mobile telecom equipment firm has seen its share prices fall to 2.20 euros in recent days -- the lowest since the mid-1990s.

The weekly Helsinki Times in its latest edition said the Nokia stocks were now below book value -- a situation described as "worth more dead than alive" rhetorically.

"The investment community is fertile ground for rumours, and there are plenty about what could happen to Nokia. One of the most persistent rumours is that Microsoft may buy the company," the weekly said.

"The alliance with Microsoft is a powerful one. Maybe Apple and Google have already won the mobile-phone business, and everyone else is doomed," it said in a report, quoting The Wall streetJournal.

"But that's what they once said about Nokia. Things change in this industry. Microsoft, which is desperate to play catch-up in smart-phones, could buy Nokia today out of petty cash."

The Bill Gates-led US software and tech giant has about 46 billion euros in cash equivalent, while Nokia's market value is 8.4 billion euros, the weekly said, adding there was no speculation on any other buyer for Nokia, ruling out Apple, Samsung or RIM.

It also suggested that Nokia could try to reverse its fortunes with bold steps.