In a TV1 interview Saturday morning, Nokia Chair Risto Siilasmaa recalled the sleepless nights caused him by the downturn of Nokia’s cell phone business and the gravity of the situation prior to the sale of the mobile phone business to Microsoft.
“Nokia was in a situation where the potential for success in the handset business was getting negligible. If we would have continued down that same path long enough, major changes would have occurred, independent of Nokia. A company that is out of money and making a loss eventually reaches a point where others make decisions on its behalf,” Siilasmaa said.
“The Microsoft deal didn’t cause me to lose sleep, it was the situation before it,” he said.
The sale of the Nokia phone unit - manufacturers of phones that had grown into national symbols in Finland - to Microsoft came as a shock to many, but Siilasmaa is careful to point out that the business world often moves in cycles. Surrendering the handset business was a rational decision for Nokia and the close of only one phase of the company.
“The smart phone business is structurally unattractive at this time, which means that we have reached an era in which two big players dominate the market. All of the others are making a loss or at best, breaking even. There is no end in sight for this phase, either.”
Siilasmaa assured his television listeners that Nokia is profitable and has a strong balance sheet. From a markets perspective, its business value has improved nearly tenfold after the sale of its handset division and purchase of its network activities.
“We can now concentrate on business that is more structurally appealing than the one which we discarded.”
No more dependency on Nokia
When asked about the possibility that Nokia would once again become the pillar of Finland’s national economy and exports someday, Siilasmaa replied evasively:
“My hope would be that no company rises to such a position in the future. It would be much better if Finland had many large and globally-successful companies, preferably a more balanced business structure.”
“But of course, Nokia also has to have big ambitions to grow,” he adds.
Nokia is now looking to promote growth with its network operations, mapping services and the development of new technologies. As an example, Siilasmaa mentions different kinds of cloud service, smart cars and the development of other smart devices. Significant investment in these areas is expected yet this year.
In particular Siilasmaa wishes to make the vision of smart cars a reality.
“In the future, a smart car could tell you about weather-related traffic jams via your smart phone, computer or television, advising that you leave 15 minutes earlier. The next step would be a self-guided car.”
“Nokia’s share would be to supply the network components to the operator, car manufacturer and the cloud service provider. Nokia’s mapping services in turn could offer services to manufacturers of self-driving cars. Services are being developed as we speak with Mercedes, for example,” he said.