Opinion Articles

Thursday, March 10, 2011

Microsoft deal may not work out, admits Nokia

Mark Bridge writes:

In recent weeks there’s been a lot of talk about the partnership between Nokia and Microsoft. But taking a look at today’s Form 20-F - the annual report that Nokia is filing with the US Securities and Exchange Commission - provides a valuable reminder that nothing’s set in stone.

“Our proposed partnership with Microsoft may not succeed in creating a competitive smartphone platform for high quality differentiated winning smartphones or in creating new sources of revenue for us”, it warns in bold print.

Risk factors include “definitive agreements with Microsoft for the proposed partnership may not be entered into in a timely manner, or at all, or on terms beneficial to us” along with fears about the “largely unproven” nature of the Windows Phone platform and damage to Nokia’s brand identity.

There are plenty of other risks noted, from employee loyalty to Microsoft’s management of consumer data.

Of course, these cautionary notes are legal requirements to prevent shareholders from taking action if anything doesn’t work out as expected… but they’re also a useful reminder that the fine print of the deal hasn’t been agreed yet.

[Form 20-F 2010 (pdf)]

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Author: The Fonecast
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The Fonecast

3/11/2011 5:00 PM

Reuters has pointed out that Nokia CEO Stephen Elop will pick up around £5 million to cover his move from Microsoft. The details are all in form 20-F; the figure includes compensation for lost income, reimbursement for fees paid to Microsoft and legal expenses.

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