Sunday, February 13, 2011

Nokia CEO Defends Deal with Microsoft

It sure looks like a sell-out to me, particularly when this guy, Stephen Elop, a Canadian who became the CEO of Nokia in September 2010, is a former Microsoft executive in charge of Microsoft Office products.

From AP:

BARCELONA, Spain (AP) -- Nokia Corp. will get billions of dollars from Microsoft Corp. to ditch its current smart-phone software in favor of Windows Phone 7, Nokia CEO Stephen Elop said Sunday, in a defense of the deal.

Nokia, the world's largest maker of phones, and Microsoft announced their alliance Friday. Both investors and employees reacted with dismay: Nokia's stock dived 14 percent and Finnish employees used flex time to go home early.

On Sunday, a day ahead of the start of the Mobile World Congress cell phone trade show in Barcelona, Nokia CEO Stephen Elop told press, analysts and industry players that apart from the benefits of the alliance that were laid out Friday, Microsoft is paying Nokia billions of dollars to switch to Windows Phone 7.

"This is something I don't think was completely explained" on Friday, Elop said.

Elop said Finland-based Nokia had been courted by Google Inc. as well, which sought to convince it to use its popular Android software for smart phones. Microsoft's payments are a recognition that Nokia had "substantial value to contribute," said Elop, who until recently was a Microsoft executive.

Redmond, Wash.-based Microsoft introduced Windows Phone 7 last year, on phones made by LG Electronics Inc. and HTC Corp., but has only captured a few percent of the smart phone market, according to analysts. Getting Nokia on board sets Windows Phone 7 up to gain a much bigger share of the market.

I don't know what Nokia's board was thinking when it picked him. He worked for three of the companies I most despise for having churned out (and still churning) not just defective and buggy but harmful products one after another to the tremendous productivity loss all around the world for decades: Microsoft, Adobe, and Macromedia. He was the last CEO of Macromedia who sold the company to Adobe. And that's why your Flash update almost always crashes your system.

If he had worked for the HP printer division in addition to these three companies, I would throw stones at him if I ever see him.

Next step for Nokia? Maybe this CEO is set to do what he did while at Macromedia: sell the company to Microsoft, while pocketing billions himself.

Again, who does Nokia's board serve? Digging around to figure out this almost self-destructive move at Nokia, I've found this from (1/26/2011) [emphasis is original]:

Just a day before Nokia announces its quarterly and yearly results, some ground-breaking news about the company's CEO appeared on the Finnish daily Kauppalehti. The newspaper claims that Nokia's chairman, Jorma Ollila, started to look for a replacement to Olli-Pekka Kallasvuo as early as spring 2010. But the search was a mere formality as Ollila had already picked his favorite - Anssi Vanjoki, former VP of the Finnish company. Vanjoki was getting ready to step in as the company's head honcho when just a week before the announcement of the new CEO, ex-Microsoft Stephen Elop's name surfaced.

The report states that Espoo chairman Ollila was threatened by American investors to pick a man from overseas. Vanjoki quit almost immediately after it was announced that Elop will be the new chief executive officer.

So the board serves "American investors", who demanded Nokia install this Canadian working for Microsoft. Who are the major American investors of Nokia?

Here's the top ten institutional investors of Nokia, all American, controlling about 8.47% of all outstanding shares:

Capital Research Global Investors
Tradewinds Global Investors, LLC
Invesco Ltd.

Any guess about which investment bank is advising these American investors? The American investment bank which Ben Bernank was afraid would topple after Lehman Brothers, perhaps? (6th paragraph from the top at the link)

(And maybe the same bank who has been advising Hosni Mubarak to hide his money and gold for the past 18 days?)


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