Nokia CEO Stephen Elop, a former Microsoft executive, is defending the company's decision to switch to Windows Phone as its primary smartphone platform and cut thousands of jobs. He told analysts and industry players that apart from the benefits of the alliance that have already been explained, Microsoft is paying Nokia billions of dollars as part of the deal.
"For all the unique elements that Nokia is contributing, including the swing factor, including the decision to make Windows Phone a challenger, Microsoft is contributing to Nokia substantial monetary value towards Nokia, because we are contributing all of these unique things," Elop said at the Mobile World Congress in Barcelona. "During our investor briefing there was a slide where we had a single line with little green checkmarks saying 'marketing and other investments' from Microsoft to Nokia. I think some people interpreted that as something that would be measured in the millions or the tens of millions, as most marketing transfers of value are. In fact, when you look at all of the value that we are contributing, and the unique nature of what we bring to the table as part of this transaction, the value transferred to Nokia is measured in the Bs, not the Ms."
At the Barcelona event, Elop was also asked whether he was a "Trojan horse." Given that Elop worked for Microsoft from January 2008 to September 2010 as the head of the software giant's Business Division, the obvious implication is that Microsoft planted him at Nokia so as to steer the company in a direction favorable to the software giant. Nokia even recently appointed Chris Weber, former Corporate Vice President leading Microsoft's US Enterprise and Partner Group, as President of Nokia (US) and Head of Markets in North America.
Of course, Elop denied the insinuation. "The obvious answer is no," he said. "We made sure that the entire management team was involved in the process, and of course the board of directors of Nokia are the only ones that can make this significant of a decision about Nokia. They made that final decision on Thursday night."
Elop also answered confirmed the he had Microsoft shares, saying that he stopped selling his shares prior to the announcement of the deal last week, as required by law. "About me being the seventh largest shareholder in Microsoft: that is not true," he said. "That would be a substantial amount of money that I don't have. When I moved from Microsoft to Nokia, I was legally prohibited from selling my shares. As soon as that lifted, I began selling. But when our discussions began, I had to stop selling again; the laws are very clear. As soon as the legal restrictions lift, of course I'll sell those shares." Elop holds about 130,000 shares worth around $3.18 million.
Nokia fans should not see this as some sort of treachery. How Elop got his position doesn't really matter: the fact is all of Nokia's management unanimously chose Windows Phone. What we can say, however, is that because Elop has such a close relationship with Microsoft, he will work twice as hard to make sure the deal leads to fruition.