Nokia's Elop dismisses Microsoft takeover rumors, expounds on WP7

Nokia (NYSE:NOK) CEO Stephen Elop said there is no truth in rumors that Microsoft (NASDAQ:MSFT) plans to take over Nokia's key devices and services unit.

Nokia (NYSE:NOK) CEO Stephen Elop


Elop, a former Microsoft executive, told Bloomberg in an interview that he had never discussed such a move with Microsoft. The rumor was reported by the blog Boy Genius Report, citing Russian blogger Eldar Murtazin. "We have a great plan for our future, and we're focused on executing that plan," he said. "The rumors are all over the place. There's no basis for them."

Speaking separately at the AllThingsD D9 conference, Elop said Nokia is going through a "painful" transition right now as it moves toward using Microsoft's Windows Phone 7 operating system as its primary smartphone platform. The company warned earlier this week of a slowdown in second-quarter profits and sales, sending its stock sliding and sparking a wave of analyst downgrades. Elop said Google's (NASDAQ:GOOG) Android platform is more competitive at the high end of the market and that, despite missteps, Nokia's Symbian will help at the low end of the market.

That bifurcation is why Elop said a Microsoft takeover of Nokia's devices unit would not make sense, since smartphones are only part of Nokia's business. "That business does not align with Microsoft's business," he said.

With regard to Windows Phone, Elop said Nokia hopes to get its first device in the market by the holiday shopping season. He also said he wants Samsung to be more successful with Windows Phone, since scale is important for the Windows Phone ecosystem.

In separate comments to BusinessWeek, Elop offered a frank look at the process behind Nokia's decision to switch from MeeGo to Microsoft's platform for smartphones. According to the report, Elop and Kai Oistämö, Nokia's chief development offer, conducted in January a series of interviews with executives and employees about MeeGo. They came to the conclusion that Nokia was on track to release only three MeeGo-driven models before 2014.

Oistämö told BusinessWeek that was the moment Nokia realized that MeeGo would not save the company. "MeeGo had been the collective hope of the company," he said, "and we'd come to the conclusion that the emperor had no clothes. It's not a nice thing."

For more:
- see this Bloomberg article
- see these two separate AllThingsD articles
- see this BusinessWeek article

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