Nokia Buys out Siemens
In the joint venture of the Nokia Siemens Networks, the Finnish mobile phone company Nokia is set to take over the 50% share owned by the German multinational conglomerate Siemens. Recent reports from the Wall Street Journal indicate that the stake is to cost $ 2.2 billion which is equivalent to ˆ1.7 billion or ?1.5bn. This is in light with the recent profits that were announced early this year. Previously, the mobile manufacturing company was incurring losses as they slipped from the number one position as global leaders in the mobile market.
The current smart phones from rival companies like Apple and Samsung in the market have led to the decreasing demand for the once popular Symbian devices. This has forced the mobile manufacturing company to venture into other fields in order to regain its position as a global market leader. The expansion of broadband technologies is an improvement of such like ventures. Nokia Siemens Networks which mainly manufacture telecommunication network equipment are in the frontline, in the long-term evolution (LTE) technology.
Nokia chief executive, Stephen Elop, in his statement, mentioned how Nokia Siemens Networks have marked a lead in LTE technology, a move that attracts a pleasant growth opportunity. Initially agreed on in April 2007, there were very little profits to show in the first few years. The global economic meltdown in the year 2008 only worsened their position. The end of the contract was this April and the only way one could leave the contract was through a buyout or alternatively, a public offer. The Nokia Lumia is now their current profitable brand as it has exceeded the Symbian devices’ profits. As a way to remain profitable, there were substantial cost cutting measures that were implemented by the company.
n.p. “Nokia to Buy Out Siemens From Joint Venture.” Wall Street Journal. 2013. Web. 1 Jul. 2013.
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