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Analyst: Nokia sold at ‘notably low price’

The timing of Nokia’s deal to sell its phone business to Microsoft came as a shock to analyst Tero Kuittinen. He was also surprised by what he claims is a “notably low price”.

Nokian Lumia-puhelin esillä Nokian messuosastolla.
Image: Sebastian Kahnert / EPA

“Undoubtedly the timing is quite a shock,” Alekstra analyst Kuittinen told Yle. According to Kuittinen, the company had seen robust growth in sales of some models over the summer.

He said the conventional wisdom among analysts was that Nokia would wait at least a year and see how newer, high-end Lumia models sell before making any such drastic decisions.

“It looks as though something has happened that forced this decision,” said Kuittinen. “Because the phone division certainly went cheaply.”

In a column for Forbes, Kuittinen described the the price of 5.44 billion euros—less than Microsoft paid for Skype in 2011—as ‘a visceral shock’.

Kuittinen also speculated about the actions of Nokia boss Stephen Elop, who now rejoins the company he left to take the top job at Nokia. Elop’s decision to end production of Symbian and Meego smartphones has been heavily criticised in some quarters as the company’s fortunes continued to fall.

“The motivation of Stephen Elop will now come under intense scrutiny,” wrote Kuittinen. “Elop came from Microsoft and decided very quickly that Windows was the only hope for Nokia’s smartphone unit, which was still selling more than 24 M units per quarter in early 2011. After he eliminated all alternative operating system options, he has now decided to sell Nokia’s smartphone unit at a notably low price… to Microsoft, the company he will now rejoin.”

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