Reuters: Nokia is burning money too fast and they might even default

elopfinger

Nokia had more than 10 billion Euros in their piggy bank in 2007, the year that the iPhone came out. Today that figure stands at less than half that. What’s most troubling is that Nokia lost 2.1 billion Euros during the past five quarters alone. If this rate of erosion continues, then things could get ugly. According to analysts who have spoken to Reuters, Nokia is at risk of running out of money in just two years. On average, the analysts that were polled say that Nokia will burn through an additional 2 billion Euros over the next three quarters. Only the most cynical believe that Nokia will default on their debt, but then again even the most negative commentators have been wrong in predicting just how bad things would get for the Finnish handset maker.

So say everything goes to hell in a handbasket, what next? Right now Microsoft is giving Nokia $1 billion a year under the guise of “platform support” payments. That number could increase in a bid to help Nokia survive. But then how will Samsung, HTC, Sony, and the others feel about Windows Phone if they know that Microsoft is supporting one of their biggest competitors?

There’s also patents, which Nokia has a ton of, could they sell some for a couple of billion in order to stay in business? Everyone is hungry to build up their patent army, so why wouldn’t a company like Microsoft buy Nokia’s patents and then promise everyone who uses Windows Phone protection against litigation?

And finally there’s the possibility of Nokia splitting up. The smartphone division would stay in Nokia’s possession, while the dumbphone unit would be given to another player. The $8.1 billion Nokia spent buying NAVTEQ back in 2007, maybe they could see that for a couple of billion as well?

It’s going to be a bumpy ride folks.

  • Nigel Prince

    Apple & Samsung will burn Nokia out for sure, it’s just a matter of time!

  • Anonymous

    If Windows Phone 8 doesnt do dramatically better, surely Android HAS to be an option. I hope they are exploring this, but I suspect not.

  • Lucas

    hmm
    not sure i agree with you. They may have burnt though a lot of cash however to
    make the transformation that is required to succeed in the future this was
    required and will still continue to do so until they have turned the juggernaut
    around. Nokia have backed (only in my opinion) a winning platform as
    convergence of devices is where the future is going. People will either choose
    Windows or Apple (not Android) for a computer and this is what Nokia is banking
    on, Nokia have done exactly the same with Windows as they did with Symbian. They
    put themself in the driving seat so that they can manipulate and grow the platform to
    their advantage the deal with Microsoft has allowed them to influence how
    Windows evolves, from an outsider looking in we cannot see YET how they are
    putting all their ducks in a row however wait for windows 8 to be launched and
    this will become more clear.

     

    Just think one log in to have your information sync
    between your laptop, Tablet, PC, Xbox and phone. This is a winning formula (though all depends on the success of Windows 8)

    • Donald Clifton

       As long as ALL your hardware bows to the Windows gods, why yes that might work. Tell me again why I need all that crap? An iPad/Android may be all an average person needs. Welcome to post-PC

      • http://www.facebook.com/jasoncarter Jason Carter

        Go ahead and develop an app on your iPad or Android tablet. Oh, that’s right, you can’t. The iPads are nice and all, but I constantly here how things don’t work on the iPad at work. Constantly. I built an app on Samsung Series 7 Slate with Windows 8 Consumer Preview installed on it and got my Token to join the Windows Store. Windows 8 tablets can be PC replacements, current iPads and Android tablets are not.  Welcome to your mobile tablet device being a full PC not an upscaled phone, it’s called Windows 8.

        • Anonymous

          The average consumer doesn’t need Windows 8 on a tablet.  Many of them are actually trying to avoid using Windows at all.  Who said most consumers are looking for PC replacements.  Many are just looking for PC alternatives.  No one needs Windows 8 to access Facebook or cruise the internet.  Windows 8 is just a waste of resources for those that don’t need its capabilities.

  • http://post404.com/ Randall Arnold

    And of course possibilities not even mentioned, that go beyond simple cash infusions or asset sales… ;)

    • http://www.intomobile.com/ Stefan Constantinescu

      I don’t think Microsoft would ever buy Nokia, simply for political reasons. Unless you’re suggesting something else?

      • http://post404.com/ Randall Arnold

        Well, I reached the end of my ability to speculate publicly due to certain restrictions, but can you go into more detail?

  • http://www.facebook.com/profile.php?id=521895067 Juan Diego

    It’s called ROI

    • Anonymous

       gotta spend money to make money

  • Anonymous

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  • Anonymous

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  • Anonymous

    my friend’s aunt brought home $17621 last month. she gets paid on the internet and bought a $566900 condo. All she did was get blessed and work up the guide revealed on this web site===>> ?????? uniquejoboffer.blogspot.com

  • Anonymous

    my friend’s aunt brought home $17621 last month. she gets paid on the internet and bought a $566900 condo. All she did was get blessed and work up the guide revealed on this web site===>> ?????? uniquejoboffer.blogspot.com

  • Anonymous

    my friend’s aunt brought home $17621 last month. she gets paid on the internet and bought a $566900 condo. All she did was get blessed and work up the guide revealed on this web site===>> ?????? uniquejoboffer.blogspot.com

  • Anonymous

    my friend’s aunt brought home $17621 last month. she gets paid on the internet and bought a $566900 condo. All she did was get blessed and work up the guide revealed on this web site===>> ?????? uniquejoboffer.blogspot.com

  • Anonymous

    my friend’s aunt brought home $17621 last month. she gets paid on the internet and bought a $566900 condo. All she did was get blessed and work up the guide revealed on this web site===>> ?????? uniquejoboffer.blogspot.com

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