• 06.30.11

Struggling Nokia Shutters Stores, Sells Messaging Business To Synchronica

Nokia’s recent woes multiplied this week as the beleaguered Finnish firm shuttered online stores in the U.S. and U.K., continuing a recent cost-saving trend. It also sold its Operator-Branded Messaging business, which it acquired only three years ago, to Synchronica for $25 million.

broken Nokia

Until now, Synchronica had operated only outside the U.S., offering mobile-messaging services in markets like South America, Europe, Russia, and Asia. Acquiring the OBM business from Nokia gives it wide-open entry into the U.S. market. Though Nokia’s phones haven’t fared all that well in the U.S., its OBM business had deals with more than 10 cell networks, including AT&T and Verizon. It’s quite a deal for the tiny Synchronica, which will provide the messaging code that industry giant Nokia continues to use in Series 40 phones, as well as develop and maintain Nokia messaging code inside millions of other Nokia devices. It’ll also see 250 employees transferring from Nokia to the smaller firm.


And it doesn’t end there. Synchronicia is also getting hold of Nokia’s cellphone IP. Twelve U.S. patents and in-process applications were key to the transaction, and Nokia’s also licensing a further eight patents to Synchronica to allow it to do business.

The sale will save Nokia money since it no longer has to run the OBM or support its operational costs, and it reduces employee headcount a bit. But the budget-slashing doesn’t stop there–the online store closeures in the U.S. and U.K. follow the closure of its French unit, along with a few other European online stores back in May. The U.S. store now redirects potential Nokia handset buyers to Amazon instead.

Integration of Windows technology into Nokia’s smartphone lineup and a high-profile product launch seemingly can’t come soon enough for Nokia–which is clinging to this plan to stay in the game until that time.

[Image: Flickr user flrnt]

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