Arik Hesseldahl

Recent Posts by Arik Hesseldahl

Microsoft Is Getting Nokia’s Phone Business for a Song

time-to-buySay what you will about the overall strategic wisdom of Microsoft paying $7 billion and change for Nokia’s smartphone business and patent portfolio, but you certainly can’t fault Microsoft for choosing to buy now versus a few years ago.

Shares of Nokia peaked in late 2007 at $40.59, when its wireless phone division still ruled the world and its share of the world’s market for smartphones, then based primarily on its since-abandoned Symbian operating system. Since then, it has all been downhill. The shares never traded higher than that price; they’ve fallen by more than 90 percent. Prior to the announcement of today’s news, American Depository Receipts of Nokia closed at $3.90. And while Microsoft is not getting the whole company, it’s certainly paying a lot less for the piece it’s getting than it would have.

As a way of placing the height of its share price in historical context, here’s a brief reminder of what the wireless industry looked like in late 2007: Apple’s first-generation iPhone was still new on the market, and the first phone running Google’s Android was nearly a year from release. BlackBerry still dominated a fair portion of the smartphone business, and its fortunes were still on the rise. Even Palm was still a market player, if a distant one, and was still a year away from pivoting toward webOS. (You remember how that turned out.)

Anyway, here’s another look at the near-total collapse in Nokia’s share price over the course of five years and change, via Google Finance:

NOK-shares

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik