Behind the Microsoft Write-Off of Nokia

UnknowingFool writes: Previously Microsoft announced they had written off the Nokia purchase for $7.6B in the last quarter. In doing so, Microsoft would create only the third unprofitable quarter in the company's history. Released on July 31, new financial documents detail some of the reasoning and financials behind this decision. At the core of the problem was that the Phone Hardware business was only worth $116M, after adjusting for costs and market factors. One of those factors was poor sales of Nokia handhelds in 2015. Financially it made more sense to write it all off.

Comments

Microsoft

[bobstreo]

Where phone companies go to die.

Re:Microsoft

[danbob999]

Nokia was dying even before being bought by Microsoft. What killed them is Symbian, and their refusal to switch to Android when it was the time (2008/2009). When they decided to switch to Windows Phone, it was already too late.

Re:Microsoft

[invictusvoyd]

What killed them is Symbian, and their refusal to switch to Android when it was the time

It actually was their refusal to open up Symbian at the right time and create a dev community around it . Had that been done, Nokia would have had the opportunity to leverage its dominant market share in the smart phone segment .

Re:Microsoft

[DrXym]

Actually what killed them was the CEO they hired to fix the company. Elop laid off most of the staff, bet the farm on using a phone OS that nobody wanted, ran the company into the ground and lost so much money that it had to sell the family silver to Microsoft.

Re:Microsoft

[DrXym]

Well they did have a sizable dev community and told it to fuck off when they dropped Symbian for Windows Phone.

A more sensible company would have moved to Android but kept the devs sweet by providing their handsets with a Symbian / QT framework so that there was a migration path.

It worked

[DNS-and-BIND]

So, everything was fine until Microsoft somehow (the article doesn't say) determined that goodwill was worth only $116 million instead of $5.4 billion. That's huge. This is the crucial piece that makes it all "make sense".

Microsoft bought their rival and destroyed them. It's all done now, Nokia isn't coming back. Microsoft can rest easy now, the threat to Windows Phone has been eliminated. It cost billions, but that's OK. Plenty more where that came from. What's the point of being a huge corporation if you can't do things like this from time to time? It's time to stroke a Persian cat and sip a snifter of brandy. The Company has been saved.