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Nokia lays out serious risks in Microsoft WP7 deal

Nancy Gohring, IDG News Service | March 11, 2011
In a filing with the Securities and Exchange Commission on Friday, Nokia laid out the threats it faces as part of its planned deal with Microsoft to use Windows Phone 7 on its smartphones.

In the filing, Nokia also warned about the challenges it faces internally as it implements the new plan for Windows Mobile. For example, it may not be able to change its mode of working or culture to work effectively with Microsoft, the company said. Because Nokia anticipates laying off a large number of workers, the remaining employees may lose motivation, energy and focus, thus reducing their productivity, Nokia said.

Because of all of the uncertainty resulting from the proposed deal, the company said it will not provide annual targets for 2011, although it expects its devices business to grow faster than the market.

It did not further elaborate on the precise amount of money that Microsoft will contribute to Nokia. In February, Nokia CEO Stephen Elop said that Microsoft would pay Nokia billions of dollars as part of the deal over an unspecified time.

 

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