Link: What will happen to Nokia?

What will happen to Nokia by Horace Dediu of Asymco.

He outlines an important point in the article.

So what would Nokia need to do to be acquired?

The first step toward an acquisition will be divestiture of its Nokia Siemens venture. The second will be a spinoff or sale of its non-smart phone division. The third might be the allocation of its IP across these separate entities or in a separate holding.

As the company is broken up, value can be released.

The last sentence reveals it all – value can be released. All too often business media in Finland at least are citing the value of Nokia’s cash reserves (that albeit being named that, aren’t really all cash) and the IP portfolio. The trouble is that under the current organisation/structure – they’re not as valuable as they could be.

Think of packaging a product. If you like a song, you’re less likely to buy the full album when you only like one part of it. If however you’re able to buy the song by itself on iTunes – the sale is a lot more probable. The same goes for businesses, except that packaging isn’t really done unless companies are forced to.

Posted on Tuesday, June 26th, 2012.