Former rubber wear maker Nokia reported better than expected profits for its telecom network equipment business but warned that its Chinese business might be a bit slow this year.
Nokia’s network gear business, which accounts for more than 90 percent of its stand-alone sales, reported fourth-quarter operating profit margin of 14.6 percent, compared with 14 percent a year earlier.
Net sales for the Nokia group decreased three percent in constant currency terms to $4.08 billion, it said.
Nokia last month started to combine its operations with Alcatel-Lucent, and this week it said it holds 91 percent of Alcatel shares.
Alcatel-Lucent said in a statement that its fourth-quarter adjusted operating profit grew to $632.86 million helped by stronger sales at the end of the year, notably in software.
Revenue over the period rose 13 percent to $7.70 billion.
Catch-up patent payments from Samsung helped Nokia’s total operating profit in the quarter grow 46 percent from a year ago to $829 million, roughly in line with market consensus.
Nokia said it would issue its full-year outlook for the combined networks business in conjunction with its first quarter results. The acquisition is aimed at helping Nokia compete with Ericsson and Huawei in the network gear market.
Nokia has buried the hatchet with Samsung and smoked the peace pipe over a long running patent dispute.
The deal was hammered out in arbitration verdict and will boost Nokia’s patent sales by “hundreds of millions of euros.”
Nokia said the settlement would lift sales at its patent unit Nokia Technologies to around $1.1 billion in 2015.
Nokia added it expects to receive at least $1.3 billion cash during 2016-2018 related to its settled and ongoing arbitrations, including the Samsung award. Nokia has a similar dispute with LG Electronics.
All this leaves Nokia free to start plotting its comeback after suffering so badly it had to flog its smartphone business to Microsoft.
Former rubber boot maker Motorola Solutions is to write a cheque for the UK-based Airwave for $1.24 billion in a bid to improve its services business.
Airwave is owned by Australia’s Macquarie Group and provides voice and data communications to more than 300 emergency and public service agencies in Blighty..
Motorola, which is famous for its walkies-talkies, sales have slipped as its major customers, which include police and fire departments as well as other government agencies, curtail budgets.
The company is trying to strengthen its services business which provides communication services to governments, businesses and public safety agencies.
Motorola Solutions said it plans to fund the purchase of Airwave, which has about 600 employees, with bank financing and cash on hand.
The deal is expected to add to adjusted earnings and free cash flow immediately after closing in the first quarter of 2016, Motorola said.
Ever since selling its phone business to Microsoft, the former rubber boot maker, Nokia has been doing rather well.
Now a network equipment maker, Nokia announced it would pay special dividends after reporting stronger than expected profits, as growth in China offset weaker demand in North America and Europe. We don’t know if it makes boots any more.
The Finnish outfit has secured regulatory approval for its proposed $17.1 billion takeover of Froggie rival Alcatel-Lucent.
Third quarter operating profit at the company’s network unit was $427 million, or 13.6 percent of sales.
That was roughly in line with $434 million year earlier but significantly above analysts’ average forecast of a profit of $324 million and a margin of 10.2 percent.
Nokia last year sold its once-dominant phone business to Microsoft and its navigation business to German car makers.
Curiously the company is thinking of releasing a smartphone again soon. Hard to think why. Maybe it should get back into the boot business.
Alcatel-Lucent is refusing to sell its undersea cables unit, which means that the former rubber boot maker Nokia will get its paws on the operation after completing its acquisition of the Franco-American group.
Nokia is spending $17 billion on Alcatel-Lucent as it wants to better compete with market leader Ericsson and low-cost Chinese powerhouse Huawei.
Alcatel had previously planned to sell a majority stake in Alcatel-Lucent Submarine Networks (ASN) or list the business separately. However it now opted to keep the unit instead.
The division, which has facilities in Calais, France and Greenwich, Britain, on the site where the world’s first transatlantic cable was manufactured in 1858, will become part of Nokia.
Ministers had thought of asking the French sovereign fund to take a stake in ASN, to ensure it keeps activities that are strategic to France’s surveillance apparatus on French soil.
But Alcatel-Lucent said France had surrendered on the idea of fighting against the submarine cable unit being bought by Nokia.
“We constantly exchange with the government, they are aware of our decision,” the spokesman said. “This will be part of discussions, but there was no objection,” a spokesman said. .
ASN has more than 575,000 kilometers of fiber-optic cable systems deployed worldwide, along with the maintenance of 330,000 kilometers of undersea systems.
Software company Microsoft said today it will make 2,300 people redundant in Finland.
Microsoft had said it will cut nearly 8,000 jobs worldwide in July.
Most of those result from its ill-fated decision to buy Nokia’s mobile unit. That decision was taken by then CEO Steve Ballmer (pictured), who decided Microsoft should pay well over the odds for the Nokia unit.
Most of the job losses in Finland will come from its product development unit in Salo.
Microsoft has made many attempts to get into the burgeoning mobile phone business and has spent untold billions on the attempt.
But yesterday market research firm Gartner said it was still failing to make headway in a market dominated by two operating systems from Google and from Apple.
Finnish company Nokia sold off its smartphone unit to Micosoft for billions in 2013 but it appears it will return to that market next year, demonstrating the wisdom of the adage “take the money and run”.
Nokia is in the process of hiring on social network site Linkedin, according to Reuters, and wants engineers and other people in its bid to return to the smartphone fold.
It has already introduced a tablet and also has introduced a virtual reality camera and it’s quite possible that it might make a successful re-entry into the smartphone world, where fortunes ebb and flow as fashion and marketing dollars dictate.
Witness, for example, the failure of Microsoft to make a go of the smartphone market, of Blackberry and more recently the poor performance of Taiwanese pioneer HTC.
There’s a lot to play for because now, as we reported last week, there’s hard evidence that smartphones and tablets are beating up PCs.
Nokia used to be in the PC market back in the late 1990s but beat a hasty retreat when it saw the writing was on the wall for niche PC builders.
A gaggle of German carmakers have written a very precise cheque to by the former maker of rubber boot Nokia’s mapping business.
Called HERE, the business is apparently worth $2.74 billion to the Germans who are desperate to create Lebensraum in the digital services for connected cars market.
Daimler, BMW and Volkswagen’s premium division Audi will each hold an equal stake in HERE and none of them seeks to acquire a majority interest, they said in a joint statement.
The deal is expected to close in the first quarter of 2016.
“For the automotive industry this is the basis for new assistance systems and ultimately fully autonomous driving,” the buyers said in a joint statement.
The Finnish company is shedding the maps business to help it focus on integrating its 15.6 billion-euro purchase of Alcatel Lucent in a deal that will create the world’s second largest network equipment maker.
Nokia built its mapping and location business on the back of an $8.1 billion acquisition in 2008 of Navteq, a maker of geographic information systems used in the automotive industry. It was Nokia’s largest deal ever, prior to the planned Alcatel-Lucent merger.
HERE provides mapping and location intelligence for nearly 200 countries in more than 50 languages and is one of the main providers of mapping and location services. The company will continue to develop its position as a strong and independent provider of maps and location-based services
Intelligent mapping systems are the basis on which self-driving cars linked to wireless networks can perform intelligent functions such as recalculating a route if data about a traffic jam or an accident is transmitted to the car.
LTE protocols being developed will pose complement existing public safety networks and that market alone will be worth $5 billion by 2020.
That’s according to ABI Research, which said that existing safety protocols like TETRA and P25 are well established because they are so stable.
But LTE vendors are working with both TETRA and P25 vendors to introduce LTE (4G) capabilities.
ABI said that since Release 10, 3GPP has included enhancements which improve the mission critical features of LTE.
LTE-Relay extends network coverage while LTE-Direct lets public safety devices create direct point-to-point communication without needing a base station.
Release 13 of 3GPP will standardise indoor positioning and push to talk capabilities.
A number of vendors is working together to show the advantages of a single unified broadband and narrowband system, with Motorola, Ericsson, Harris and Nokia working together.
ABI believes that the first markets to have a fully working public safety network will be the USA, the UK and South Korea.
Former Finnish rubber boot maker, Nokia is now back to black after selling its mobile phone business to Microsoft.
Nokia reported a surprise rise in second-quarter profits, helped by high-margin software sales and fewer low-priced contracts at its mainstay telecom network equipment business.
Nokia appears to be rolling in it and in April proposed a 15.6 billion euro take-over of its French rival Alcatel-Lucent.
Operating profit at its network unit was $343 million in the second quarter, or 11.5 percent of sales.
That was up from $307 million euro a year earlier, and well above analysts’ average forecast of a profit of $257 million euros and a margin of 8.3 percent.
Network equipment sales were $2.99 billion
The company also said its strategic review of its Here navigation business was now in an advanced stage.
Last week, Reuters claimed that Nokia was closing in on a deal to sell the maps to German car makers for about $3.29 billion.