Nokia believes that this is the best option for the next step in Vertu's journey of delivering excellence, enabling the brand to focus on increased opportunities for growth in the luxury category.
"With its strong brand, undisputed category leadership and attractive growth outlook, Vertu fits well with EQT VI's investment strategy. EQT VI is excited about the opportunity to develop Vertu as a standalone company and plans to drive the development of the luxury mobile phone category through significant investments in retail expansion, marketing and product development," said Jan Ståhlberg, Partner at EQT Partners, Investment Advisor to EQT VI.
Having delivered double digit sales growth over the past few years, Vertu continues to lead its class with a portfolio of high end mobile phones, increasingly led by its smartphones and tailored services, offering unique access, experiences and opportunities to a discerning and growing customer base.
"This is a logical next step in the evolution of Vertu as the world leader in luxury mobile products," said Perry Oosting, President of Vertu. "Since Vertu began in 1998, our business has grown every year, due to the efforts of our talented workforce and the unique products and services we offer to our customers. We believe that EQT VI will position Vertu to continue to grow and lead in our marketplace."
Striking the perfect balance between an unparalleled art of craftsmanship and modern technology, Vertu offers an unrivalled range of category leading mobile phones as functional as they are aesthetically desirable.
Vertu prides itself on being a pioneer in delivering relevant, tailored luxury information and services direct to mobile handsets through Vertu Concierge, and continues to expand this proposition to deliver unparalleled customer service.
Vertu is headquartered in Church Crookham, UK and employs approximately 1,000 people worldwide.
The transaction, the terms of which are confidential, is expected to close during the second half of 2012, subject to customary regulatory approvals and closing conditions. Nokia will retain a 10% minority shareholding in Vertu.
Nokia starts to sink; 10,000 jobs cut - ZDNet
Nokia will lay off 10,000 jobs worldwide by the end of 2013 in a bid to cut costs, the Finnish phone giant said on Thursday.
Phone-making plants and research and development will also take a hit, including centers in Ulm, Germany and Burnaby, Canada. A manufacturing plant in Salo, Finland will close but its R&D efforts will remain there.
The company’s management will also be shuffled, chief executive Stephen Elop said in a statement.
“These planned reductions are a difficult consequence of the intended actions we believe we must take to ensure Nokia’s long-term competitive strength.”
That’s corporate speak for: cut now, or face not being able to pay our employees later down the line. In simple terms, a cut of non-essential employees takes the heat off its falling operating margin.
Its plan to “return to sustainable adjusted operating profitability there as quickly as possible” has to come now or face the risk of posting an operating loss down the line. That’s the beginning of the end for any business.
Nokia said its second-quarter adjusted operating margins for its phone unit would be “worse” than a loss equivalent to 3 percent of its first-quarter revenue. The company will also book a restructuring charge of €1 billion ($1.3bn).
Management shuffle, check. Reduction in operating costs, check. Job losses as a skimming off the top layer, check. All things point to “doing a RIM”.
In a fight for corporate survival, the signals show Nokia is losing the smartphone fight and has finally woken up to it. It doesn’t take a genius to note it’s the iPhone and Android smartphone battle that’s hammering Nokia.
Nokia, unlike RIM, is relatively employee heavy. It can start hacking away at its employee base without hitting its operations too negatively. RIM, on the other hand, had around 16,500 before the June layoffs. Nokia already cut 4,000 jobs earlier this year and shifted its manufacturing core from Finland to Asia. It followed a 3,500 job cut in September 2011.
A few in between: that’s 24,000 job losses since the former Microsoft executive took charge of the Finnish-based company.
RIM has a strong cash position it can dip into. It had more than $2 billion at the last count it can chip away at instead of cutting essential jobs it can’t afford to lose. Shareholders will not like the idea of it, but it’ssomething.
Bloomberg reports Nokia had 53,500 workers at the end of March. We can probably knock that down a tier to roughly 45,000 give or take 5 percent.
The likelihood is Nokia will not bounce back on its own. Microsoft could step in considering its “strategic partnership” with the phone maker. Microsoft provides the mobile operating system, and Nokia provides the phones. It’s a relationship like no other, but as with any marriage, if one goes down and leaves a chunk of debt the other will suffer.
But following a report that Microsoft looked at Nokia as a tempting offer, not before backing away promptly unimpressed by what it saw, it seems somewhat unlikely.
We’ll see where it goes from here. Nokia’s second-quarter results will be an interesting one.
Image credit: Roger Cheng/CNET.
Related:
Nokia to cut 10,000 jobs as second quarter weak - msnbc.com
PARIS (Reuters) - Loss-making Finnish cellphone maker Nokia plans to cut another 10,000 jobs globally in its biggest revamp in recent history, while it warned the second-quarter loss from its cellphone business would be larger than expected.
The cuts, which include the closure of Nokia's only plant in Finland, bring total planned job cuts at the group since Stephen Elop took over as chief executive in 2010 to more than 40,000.
Nokia said on Thursday that it would book additional restructuring charges of around 1 billion euros ($1.3 billion) by the end of 2013.
The company, whose cash position is increasingly scrutinized by investors, also said restructuring-related cash outflows would be around 650 million euros in the remaining three quarters of 2012 and around 600 million in 2013.
Shares in Nokia fell 9 percent in early trading and were down 6.9 percent at 0711 GMT.
Nokia stock has crashed more than 70 percent since it announced in February 2011 that it was dropping its own Symbian smartphone operating software and switching to Microsoft's largely untried Windows Phone system.
"These changes underline the seriousness of the challenges Nokia is facing, particularly in light of the eye-watering competition from Apple and Samsung," said Ben Wood, head of research at CCS Insight.
Nokia also said it would sell luxury phone business Vertu to venture firm EQT. ($1 = 0.7953 euros)
(Editing by David Holmes and James Regan)
(c) Copyright Thomson Reuters 2012. Check for restrictions at: http://about.reuters.com/fulllegal.asp
Nokia sells Vertu luxury-handset unit to EQT - Marketwatch
By Sven Grundberg
STOCKHOLM--Ailing Finnish mobile handset maker Nokia Corp. /quotes/zigman/162154/quotes/nls/nok NOK -2.79% Thursday said it is selling its Vertu luxury handset business to private equity firm EQT, in a bid to raise cash.
Nokia said the sale, expected to close in the second half of 2012, follows an ongoing strategic review of non-core assets that could include further divestments of other assets.
Nokia said it would retain a minority shareholding of 10% in Vertu, leaving EQT's VI fund with a 90% ownership. Terms of the deal weren't disclosed.
EQT said it hopes to capitalize on the potential for growth through accelerated retail expansion as well as significant investments in marketing and product development.
Nokia's sale of independently run Vertu comes as investors are becoming nervous about the Finnish company's high cash burn.
In a separate statement Thursday, Nokia said it would cut another 10,000 jobs globally and warned that its operating margin in the Devices & Services unit would fall short of earlier expectations. The job cuts will help reduce annual costs by about EUR3 billion by the end of 2013, Nokia said.
Nokia announced close to 14,000 job losses last year and recently said it wants to "substantially deepen" previously announced cost savings of EUR1 billion, as well as sell some assets to strengthen its financial position.
Nokia swung to a net loss of EUR929 million in the first quarter this year from a profit of EUR344 million a year earlier, and its cash position is deteriorating. At the end of the quarter the company held EUR4.87 billion in cash or cash equivalents, down EUR709 million from the end of the fourth quarter and down 24% from the same time last year as it struggles with a painful strategy overhaul.
The company's credit was downgraded to junk status by credit rating companies Fitch and Standard & Poor's last month and to near-junk by Moody's.
The combination of Nokia's accelerating cash burn, along with the continued steep fall in handset sales, "could be enough to burn through most of Nokia's existing cash pile and even bring into question Nokia's very survival," Societe Generale analyst Andy Perkins wrote in a recent note to investors.
Vertu is the biggest player in the luxury handset market. Its devices--retailing for up to $300,000--are finished with fine calf leather, alligator skin or diamonds and are sought-after status symbols in Russia, China and the Persian Gulf.
The unit was founded in 1998, and is headquartered in Hampshire, southern England. While Nokia's main mobile handsets business has been battered by bruising competition from Apple Inc.'s (AAPL) popular iPhone, and devices running Google Inc.'s (GOOG) Android software, Vertu has remained profitable.
Vertu's devices run Nokia's outdated Symbian software. But Vertu customers gain access to an exclusive concierge service, that provides a wide range of personal services, booking and recommendations. It also runs members' clubs in major cities around the globe.
The unit has around 1,000 employees and has 450 points of sale globally, including some 25 Vertu boutiques, in approximately 50 countries. In 2011, Vertu generated sales of EUR266 million.
At 0716 GMT shares in Nokia traded 3% lower at EUR2.15.
Marietta Cauchi and Anna Molin contributed to this article
Timeline: Nokia's rocky road under Stephen Elop - msnbc.com
(Reuters) - Finnish phone maker Nokia said on Thursday it would cut 10,000 more jobs and sell its luxury handset unit Vertu, its latest move to slash costs as it loses market share and burns through cash.
The following are key events since Chief Executive Stephen Elop took over in September 2010:
FEBRUARY 2011
Nokia announces it is teaming up with Microsoft Corp for its new smartphones and dumping its own Symbian platform. Elop confirms the company will cut jobs in Finland and elsewhere.
APRIL 2011
Nokia says it will axe 7,000 jobs and outsource its Symbian software development unit to cut 1 billion euros ($1.2 billion) in costs.
The move includes laying off 4,000 staff and transferring another 3,000 to services firm Accenture - a total of 12 percent of its phone unit workforce. Accenture takes over Nokia's Symbian software activities.
SEPTEMBER 2011
Nokia says it will close its plant in Cluj, Romania -- slashing 2,200 jobs -- and cut 1,300 jobs in its location and commerce business unit which develops maps for mobile phones.
OCTOBER 2011
Nokia unveils two sleek new Microsoft Windows phones in time for Christmas, the first step in its fightback against Apple and Google.
NOVEMBER 2011
Nokia Siemens Networks, Nokia's network equipment joint venture with Siemens, announces it will cut 17,000 jobs, nearly a quarter of its workforce. The move aims to save about 1 billion euros a year.
FEBRUARY 2012
Nokia unveils a plan to cut 4,000 more jobs at its plants in Finland, Hungary and Mexico as it moves smartphone assembly work to Asia.
JUNE 2012
Plans to cut another 10,000 jobs globally. Warns second-quarter loss from its cellphone business will be larger than expected. It says industry competition is harsh.
Sells its luxury handset unit Vertu to EQT VI, a European private equity firm, for an undisclosed sum.
(Reporting By Tarmo Virki; Editing by Erica Billingham)
(c) Copyright Thomson Reuters 2012. Check for restrictions at: http://about.reuters.com/fulllegal.asp
Nokia to Cut 10,000 Jobs After Weak Quarter - CNBC
Loss-making Finnish cellphone maker Nokia plans to cut another 10,000 jobs globally in its biggest revamp in recent history, while it warned the second-quarter loss from its cellphone business would be larger than expected.
The cuts, which include the closure of Nokia's only plant in Finland, bring total planned job cuts at the group since Stephen Elop took over as chief executive in 2010 to more than 40,000.
Nokia [ Loading... () 
The company, whose cash position is increasingly scrutinized by investors, also said restructuring-related cash outflows would be around 650 million euros in the remaining three quarters of 2012 and around 600 million in 2013.
Shares in Nokia fell 9 percent in early trading and were down 6.9 percent .
Nokia stock has crashed more than 70 percent since it announced in February 2011 that it was dropping its own Symbian smartphone operating software and switching to Microsoft's [MSFT Loading... ()
"These changes underline the seriousness of the challenges Nokia is facing, particularly in light of the eye-watering competition from Apple and Samsung," said Ben Wood, head of research at CCS Insight.
Nokia also said it would sell luxury phone business Vertu to venture firm EQT.
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