Nokia to Sell Cell Phone Business to Microsoft

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Marco Werman: I'm Marco Werman, this is The World. Big tech business news from Finland today. Nokia, once a global leader in cellphones, has agreed to sell its handset division to Microsoft. The deal, reportedly valued at more than $7 billion is the latest attempt to revive the flagging fortunes of Nokia, and for Microsoft to make a dent in a market now dominated by Google's android and Apple's iPhone. The World's Clark Boyd has been following the story. Anything surprising in this move, Clark?

Clark Boyd: Well, to me, not really, Marco. I mean you had these two companies coming together a couple of years ago anyway when Nokia agreed that it was going to run Microsoft's mobile operating system on all of its handsets anyway, so the two companies have been playing ball together for a while now. As far as the reaction in Finland itself, a Finnish historian who wrote the book on Nokia in Finland, his name is Martti Haikio, here's what he had to say about it.

Martti Haikio: We all have followed several years the decline of the handset business. Something dramatic had to be done. Had they not sold, it would have been the bankruptcy of the whole business.

Werman: So, Clark, Nokia was lagging already financially, will this move be enough though, do you think, to reverse Nokia's fortune?

Boyd: Well, Marco, I think it's really hard to tell, that there's no clear answer at this point. Some in the tech business community are definitely seeing this as a hail mary for both Nokia and Microsoft when it comes to trying to make a dent in the market that Google and Apple have.

Werman: And is it gonna be like a Microsoft skin with Nokia guts? Where will these phones be made? Are the Finns worried about job losses?

Boyd: The Finns are not worried about job losses, at least not for right now because Steve Ballmer, the CEO of Microsoft, came out and said very clearly, we want to keep the R&D, the research and development, in Finland. And so I think a lot of Finns were happy to hear that those jobs will remain there.

Werman: There's another thing though about Nokia and that is its prominent place in Finnish culture. I mean people know Finland, if they know anything, they know it through Nokia.

Boyd: Yeah, I mean here's a company that dates back to 1865 and started out life really as a paper manufacturer, and then grew over the years into this incredible multinational conglomerate that you know, Nokia was sort of the face of Finland around the world. And as you and I were actually talking in the newsroom earlier, it was also the face of cellphones around the world.

Werman: My first cellphone, and when I went to Dakar I needed a burner, I got another Nokia.

Boyd: It's my first cellphone too, and in fact, that's a really interesting point. You talk about places like Dakar, in the developing world you go around and a lot of people are still using Nokia handsets. So you know, I think if there's a ray of light somewhere for both Nokia and Microsoft in this case, they would be looking at the developing world and saying still some name recognition there.

Werman: As a Finnish musicians once told me, such an odd thing, we are quiet people, why do we get known for this device that you talk to?

Boyd: Well, that's really interesting and in fact, Finland's foreign minister, his name is Alexander Stubb, he talked about that kind of pride of place that Nokia has in Finland. Let's listen to what he told the BBC earlier today.

Alexander Stubb: I think a lot of people in Finland are obviously emotional about the sale because we've basically grown up with Nokia mobile phones in our pockets. Now, having said that, it's also very symbolic because Nokia was part of the success story of Finland from the beginning of the 1990s, but once you look and sort of push the fog away, and look at the perhaps silver lining of the cloud, this could be basically a success in disguise.

Boyd: So not everybody's sad and it should be pointed out that, you know, Nokia is a lot more than just handsets. They're also a huge world leader in networking and intellectual property. So they've got a lot of other arms in the business, but it remains to be seen what happens with the handsets.

Werman: The World's Clark Boyd and now he won't even take my calls. By the way, the name Nokia, it's a town where part of the original company, a rubber plant actually, set up shop in 1904.