The Chief Executive of Nokia, Stephen Elop, has come out saying that speculations regarding an alleged buyout of the company’s mobile phone manufacturing unit by Microsoft are baseless. This claim had been made a couple of days ago at a website which cited a blogger as its source. Elop said in an interview that he had never been in a discussion with Microsoft about an acquisition. He added that the Finnish cell phone manufacturing giant has big plans for the future and at the moment it is completely focused on the execution of those plans. He said that the rumors were not even remotely true and that there was no basis for them.
The shares of the company faced losses after the report came out and the closed 0.8% down in Helsinki today after having gone down by as much as 10% earlier. Two other sources, who preferred to stay anonymous, familiar with the plans of Microsoft also said that the speculation was false. Yesterday, the Finnish company was forced to scrap its forecasts for the full year sales and margins. Nokia said that the revenue of the unit is expected to fall short of its earlier projected range in this quarter by a substantial margin. Their stocks went down by as much as 18%, which is a 13 year low, a surpassing the 14% fall of February ‘11 after Nokia announced its deal with Microsoft, adopting the Windows Phone 7 platform.
Earlier today, a spokesman for the company based in Espoo, Finland, Doug Dawson, waved away the acquisition report as being completely baseless in a telephone interview. Microsoft’s spokeswoman, Melissa Havel, declined to comment on the issue.
Elop, who had been hired at Nokia from Microsoft in September last year, spoke to the investors yesterday saying that he is very confident about Nokia being able to ship its first Windows Phone 7 based mobile phone in the final quarter. However, before they take that step, Nokia will first have to cope with customers who are fleeing from the Symbian platform which Nokia decided to abandon after it failed to keep pace with Apple’s iPhone and Google’s Android.
Elop said that Nokia has operations in both cheap handsets and high end phones. He added that the focus of Nokia’s relationship with Microsoft is the smartphone business and that the low end phones are out of the range for Microsoft. He described the partnership between the two companies as the most effective way in which the companies can work together.
According to an analyst at Berenberg Bank in London, Adnaan Ahmed, the acquisition of Nokia’s mobile phone business by Microsoft will not make sense. Nokia, meanwhile, is under increasing pressure from its investors as its credentials are beginning to tumble following the fall in the company’s shares.
