Addressing Nokia Oyj employees in January 2011, Chief Executive Stephen Elop - at that point only four months into the job – dramatized the company’s predicament by comparing it to standing on a burning platform.
Nearly a year and a half on, and with Nokia’s Lumia mobile phone range failing so far to revive sales, its position still looks frail. Its shares have lost 90 percent in five years and its debt is rated junk by two of the three major ratings agencies.
Might Microsoft Corp , Elop’s former employer and whose software Lumia is based on, have to step in to help Nokia out, seeing the Finnish company as a valuable point of entry into the cellphone market?
Analysts have attributed Nokia’s decline in large part to its late response to Apple Inc , whose iPhone redefined the smartphone market in 2007, and some see a marriage with Microsoft as possibly a last chance to turn the group around.
For Microsoft the relationship is important, because Nokia was its first major break into the smartphone market after a decade of heavy investment. During that period other cellphone makers either chose to use their own software – as did Apple – or favored Google Inc’s Android.
“If Nokia ends up in financial difficulties I believe the helping hand would be there,” said Sami Sarkamies, an analyst at Nordea.
Nokia and Microsoft declined to comment.