Some Nokia Shareholders Not Happy with Microsoft Deal

In the wake of Nokia's dramatic decision to drop its failing smartphone strategy and instead adopt Microsoft's Windows Phone platform, the struggling company is finding itself under attack from those who disagree with the new direction. A group claiming to represent a small (and young) group of shareholders is calling for the immediate ouster of Nokia CEO Stephen Elop and has plans to turn around Nokia. These plans, of course, almost completely resemble the company's previous, failed strategy.

"We are a group of nine young Nokia shareholders," an open letter from the group begins. "All of us have worked with Nokia in different capacities in the past. We plan to challenge the company's strategy and partnership with Microsoft in the next Annual General Meeting scheduled for May 3, 2011."

The group specifies a number of changes it would make if the members are elected to a majority role in the Nokia board of directors. These changes including firing Elop and shaking up the Nokia leadership team, restructuring the Microsoft deal as a trial for North America only, focusing again on Meego as Nokia's primary smartphone strategy, extending support for the legacy Symbian OS, and more.

There are other concerns from the Nokia ecosystem. A Finnish trade union whose members will lose their jobs because of Nokia's abandonment of Symbian R&D is demanding that the company pay its 5,000 members 100,000 euros each for severance and reeducation. The union estimates that Nokia cutbacks in Finland could ultimately result in the loss of 6,000 jobs there. (Elop previously noted that Nokia would experience "substantial" layoffs in Finland and other locales in which it does business. The company employs more than 130,000 worldwide.)

Not coincidentally, Nokia's most recent quarterly results hint at the troubles to come. Total revenues were up 6 percent year over year to 12.7 billion euros, but profits were down because consumers are picking other high-end phones, like the Apple iPhone and those based on Google's Android. Unit phone sales were down, as well—3 percent—to 124 million devices. And Nokia's market share suffered even more, thanks to strong growth from the competition: The company now controls 31 percent of the market, down from 35 percent a year ago.

What Nokia doesn't have is a viable high-end smartphone that can compete with the market leaders. It's also lacking any kind of tablet strategy, though this part of the company's product line wasn't discussed during the Microsoft announcement. (Speculation is that Nokia will sell Windows 8-based tablets starting in late 2012.)

Finally, Google, which was passed over by Elop and Nokia, hasn't reacted too kindly to the snub. In addition to some carefully crafted Twitter tweets by Google execs this past week, outgoing Google CEO Eric Schmidt said at Mobile World Congress that Nokia had "made the wrong choice" in picking Microsoft. "We would like \\[Nokia\\] to adopt Android at some point in the future, and that offer remains open," he said. "We think Android was a good choice for Nokia. We are sorry they made a different choice."

TAGS: Windows 8
Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.