Microsoft Will Not Take Over Nokia

The Finnish telco partnered with Microsoft in a bid to claw back market share last year

Speculation that Microsoft will buy out Nokia is “baseless”, said Nokia CEO Stephen Elop in Dubai yesterday. “There is absolutely no foundation for a takeover by Microsoft.”

Nokia reported full year losses of $1.4 billion in 2011. The one-time industry leader has been eclipsed by Apple and other smartphones running Google’s Android software at the upper end of the market.

The Finnish firm partnered with Microsoft’s operating system in a bid to claw back market share last year and launched the Lumia 800 and Lumia 710 in the US in October.

Nokia said “well over one million” Lumia devices have been sold to date and analysts have deemed the launch a success.

“We are seeing early traction in the US and our confidence levels are high. But we have a lot of work to do in this transition.”

“The Middle East and Africa plays an important role because it is an area, relative to other regions, where we have a strong market share position. Smartphone demand in the UAE is relatively high due to high disposable income and high device turnover,” said Elop.

“[In the other Gulf countries] there is mixed demand, including many first-time smart phone buyers who upgrade from lower priced models.”

Elop, who joined the firm in September 2010, stressed the importance of global and regional ‘eco-systems’ as the key to Nokia’s turnaround.

“It is not a phone battle, it is an operating system battle. Apple and Google Android are our competition, while HP and Samsung are our friends. We all need to work together to participate in and build our Windows eco-system.”

“Nokia and Windows work closely together on hardware and software. We have promised Microsoft we will do our best work for them.”

Elop added that Nokia chose to partner with Microsoft as the firm wanted to “differentiate” itself as much as possible. “It could be a camera, it could be a new navigation system. We felt we could do that with Microsoft.”

Nokia today announced plans to cut 4,000 more jobs at its plants in Finland, Hungary and Mexico as it seeks to cut costs by moving smartphone assembly work to Asia.

The cuts of eight per cent of the phone business workforce bring total planned job cuts at the group since Stephen Elop took over to more than 30,000.

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