Nokia shareholders clamour for answers on Microsoft cooperation
The Annual General Meeting of Nokia saw a record turnout on Tuesday.
More than 3,000 shareholders appeared at the Helsinki Fair Centre to listen to President and CEO Stephen Elop address the shareholders for the first time, in what many of them said was an inspiring speech.
The meeting chose a number of new members for the company’s Board of Directors, including paper manufacturer Stora Enso CEO Jouko Karvinen, Finance Company Sampo CEO Kari Stadigh, oil company Statoil CEO Helge Lund, as well as Stephen Elop himself. Chairman Jorma Ollila said that the search is already on for his successor. Ollila has said that he will leave the post at next year’s AGM.
: Nokia’s Windows phones are very important. How does Nokia plan to press the gas pedal and change engines at the same time?
“Our cooperation has gone well. We are very enthusiastic about our family of products, which we will publish soon. With the help of our cooperation with Accenture we will see to it that we will have the Symbian operating system available after the change. We are increasing investments into the operating system of cheap phones, and in technologies of the future”, says Nokia CEO Stephen Elop
Analyst Ben Wood says that Nokia has been wandering aimlessly for years as in a dream, and done only what it has done before. Why is this?
“First of all, Nokia’s management has not wandered in a dream. Nokia’s strategy has been quite clear, because we saw this change, and we have the steps for how to move ahead. As far as Symbian is concerned, we saw the forthcoming change on the basis of the demands of our customers, but we are not able to influence it as quickly as we should have”, says Chairman of the Board Jorma Ollila.
Did you consider using the Meego operating system along with other manufacturers?
“We discussed Meego with HTC, RIM, Samsung, LG, and Motorola. One manufacturer was fairly interested in Meego and the others have their own plans, and they were not particularly interested in Meego. They were afraid that Nokia had too much power in Meego”, Elop says.
There have been extensive reports in the media about the security breach affecting the Sony PlayStation. Microsoft Windows has been very vulnerable in data security. How will Nokia protect its telephones and its services with many credit card transactions?
“Data security and privacy are very important for us, and we need to take care of it in all of our business activities. We have comprehensive means for securing the privacy and data security of our consumers. Our phones have a completely different operating system than the Windows that is in a computer.”
Nokia pays Microsoft for the use of Windows, and gets payments in return. Can you say how many billions in profit are involved, and what is the schedule for payment?
“We do not give any details on compensations and fees. If we would tell them now, our competitors would get information which would cause problems for all of us. The payments [software licences] that we pay to Microsoft are very competitive, because we aim to sell a significant number of Windows phones.”
Will the Meego product that comes on sale at the end of the year be a touch-screen computer?
“No, it is not a tablet computer. There are 200 touch-screen computers on the market, and the only one that is a financial success is the Apple iPad. There is no point in us imitating it, like all of the others are doing without success. We need to make different kinds of products.”
Competition in China is intense, and they copy almost anything there. How can Nokia secure its competitiveness in China?
“Our industrial rights are our most important asset right after our personnel. It has long been predicted that officials in China would start taking a more serious attitude toward industrial rights, now that their own industry is starting to produce patented inventions. We are approaching this moment, and we are starting to defend industrial rights in China.”
When Nokia announced its new strategy, investors were not immediately excited. The share price fell sharply. Is this because Nokia has failed in assuring investors or is this cooperation simply bad news?
“Big investors understand and support our strategy. The first reason for the uncertainly was that in February we had no binding contract. In addition, we could not initially report on savings in costs, and we have still not revealled precisely when the first Windows phone will be available. The message from investors was clear to us: Nokia needs to show that changes will be implemented, and that they will bring results.”
Previously in HS International Edition:
Nokia´s new strategy prompts suspicions among investors and consumers alike (15.2.2011)
Nokia shareholders will get to grill Jorma Ollila (3.5.3011)
Nokia announces job reductions and outsourcing of 7,000 employees worldwide (27.4.2011)
Resolutions of Nokia Annual General Meeting 2011