FIRE SALE
Analyst Tero Kuittinen at consultancy Alekstra said the sale price of Nokia’s phone business, about a quarter of its sales last year, represented a “fire sale level”, though others were less clear about what a shrunken Nokia was worth.
The price agreed for the devices and services business gives it an enterprise value of about 0.33 times sales for a loss-making business, about half what Google paid for Motorola’s handset business in 2012.
“What should be paid for a declining business, where market share has been constantly lost and profitability has been poor?” said Hannu Rauhala, analyst at Pohjola Bank. “It is difficult to say if it’s cheap or expensive.”
Nokia is still the world’s No. 2 mobile phone maker behind Samsung, but it is not in the top five in the more lucrative and faster-growing smartphone market.