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Nokia Faces Class-Action Suit Over Windows Phone Deal

Posted by Soulskill on from the barn-doors-and-horses dept.

nk497 writes "Nokia has been hit with a class-action suit, with the claimant accusing the company of making 'false and misleading' statements about the ability of its deal with Microsoft to revive the struggling mobile maker. 'The complaint alleges that during the Class Period, defendants told investors that Nokia's conversion to a Windows platform would halt its deteriorating position in the smartphone market,' read a statement (PDF) from the law firm Robbins Geller Rudman and Dowd. 'It did not.'"

6 of 257 comments (clear)

  1. The ole' Embrace and Extend by sl4shd0rk · · Score: 5, Insightful

    Historically speaking, entering any kind of business deal with Microsoft usually ends badly.

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    1. Re:The ole' Embrace and Extend by Anonymous Coward · · Score: 5, Informative

      When one of the world's largest corporations invests in you, you are not going to go out of business the next day, or the next year.

      ïMicrosoft's new "strategic partnership" with Nokia is not its first. For a decade the software company has courted and consummated relationships with a variety of companies in mobile and telecom. Here are the ones I can remember:

      LG. In February 2009 Microsoft Corp. signed a multiyear agreement for Windows Mobile to be included on devices from LG Electronics Inc. LG would use Windows Mobile as its "primary platform"for smartphones and produce about 50 models running the software.

      What happened? LG made a few Windows Mobile devices but with WinMo uncompetitive, they abandoned the platform and moved to Android losing years of market presence and all their profits.

      Motorola. In September 2003, Motorola and Microsoft announced an alliance. "Starting with the introduction of the new Motorola MPx200 mobile phone with Microsoft Windows Mobile software, the companies will collaborate on a series of Smartphone and Pocket PC wireless devices designed to create a virtual "remote control" for the Web-centric, work-centric, always-on-the-go mobile professional." In addition, the alliance includes cooperation on joint marketing and wireless developer programs.

      What happened? Motorola launched a series of Windows Mobile phones culminating in the Motorola Q "Blackberry killer". As Motorola hit the rocks in profitability new management reached for the Android liferaft. The company now relies exclusively on the Droid franchise.

      Palm. In September 2005 Palm and Microsoft announced a strategic alliance to "accelerate the Smartphone market segment with a new device for mobile professionals and businesses. Palm has licensed the Microsoft Windows Mobile operating system for an expanded line of Treo Smartphones, the first of which will be available on Verizon Wirelessâ(TM) national wireless broadband network."

      What happened? Palm shipped a few Windows Mobile, famously dismissing Appleâ(TM)s potential entry as something "PC guys" could never achieve. A new CEO, a private placement and an acquisition later the company is a division of HP making its own operating system.

      Nortel. When Steve Ballmer was famously laughing at the iPhone and saying that he likes the Windows Mobile strategy "a lot" he was sitting next to the then-CEO of Nortel (Mike Zafirovski formerly of Motorola) with whom the company had just closed a strategic deal. "an alliance between Microsoft and Nortel announced in July 2006 ⦠includes three new joint solutions to dramatically improve business communications by breaking down the barriers between voice, e-mail, instant messaging, multimedia conferencing and other forms of communication".

      What happened? Nortel declared bankruptcy two years later.

      Verizon. In January 2009 "Verizon Wireless has selected Microsoft Corp. to provide portal, local and Internet search as well as mobile advertising services to customers on its devices. The five-year agreement will go into effect in the first half of 2009 when Microsoft Live Search is targeted to be available on new Verizon Wireless feature phones and smartphones." The deal would ensure Bing distribution to all of Verizonâ(TM)s smartphone customers.

      What happened? Bing did ship on some devices but in October 2009 Droid came to Verizon.

      Ericsson. In September 2000, "Ericsson and Microsoft Corp. today launched Ericsson Microsoft Mobile Venture AB. This previously announced joint company will drive the mobile Internet by developing and marketing mobile e-mail solutions for operators. The first solutions are expected to be on the market by the end of the year. The company is part of a broader strategic alliance between Ericsson and Microsoft"

      What happened? Ericsson divested itself of the mobile division forming a joint venture which would go on and make more strategic alliances with Microsoft over Windows Mobile culmina

    2. Re:The ole' Embrace and Extend by alexo · · Score: 5, Informative

      Adding an attribution to Horace Dediu (the original author) is not that hard.
      Or possibly even a link to the original article.

  2. Re:Oh yeah, baby. by Racemaniac · · Score: 5, Insightful

    I'll be rich!

    no you won't, but your lawyers will be :)

  3. Re:Another ridiculous lawsuit by Anonymous Coward · · Score: 5, Interesting

    It just proves that in America, you can sue anybody for anything.

    Uh...yeah? That's the way the system works. Anyone can bring an action against anyone else and the court must hear it.

    I could file paperwork with my local court saying you are a douche and that somehow harmed me. They would read through the documents and (probably pretty easily) come to the conclusion that I haven't made a case that you broke the law and/or harmed me and throw it out.

    Some cases aren't as clear-cut as my example and require a judge and jury to decide.

    Could you imagine if we used your model? You can't sue anybody for anything--only stuff I think is legit. That would put you in a fairly powerful position....something like 'dictator' or whatever.

  4. Re:Another ridiculous lawsuit by fuzzyfuzzyfungus · · Score: 5, Interesting

    Eh, I wouldn't be so quick to dismiss it.

    If you look at various SEC mandated, or voluntary, disclosures from publicly traded companies, you'll almost always see something like this example from Time Warner.

    Legally, distinguishing between statements of fact and 'forward looking statements' makes a difference. It's like the securities equivalent of the “These statements have not been evaluated by the FDA. This product is not intended to diagnose, treat, cure or prevent any disease.” tag you always see on 'dietary supplements'.

    So, if some optimist was given information that constituted a forward looking statement, with the usual boilerplate, about what Nokia hoped their strategy would do, they can go shove it. If Nokia outright claimed that this move would have a specific, definite effect, on their market position or stock price, Nokia may well have shoved their foot in their mouth, good and hard...