Nokia to pump $250M into mobile venture capital fund that did not help
January 29, 2013 | By Phil Goldstein
Nokia (NYSE:NOK) said it plans to invest $250 million in a new venture capital fund to give money to promising mobile startups, part of its strategy of investing in future mobile opportunities.
The Finnish handset vendor said the cash will go into a third fund from its Nokia Growth Partners operation, which has a total of $600 million under management. The fund will invest between $5 million and $15 million and will work "closely with other value added investors offering complementary skills and perspectives."
"Over the past decade, Nokia has developed an innovative venturing strategy," Nokia CFO Timo Ihamuotila said. "Our ongoing commitment to Nokia Growth Partners reinforces Nokia's support for a vibrant mobile ecosystem and our determination to collaborate with industry innovators to build great mobile products." Under CEO Stephen Elop, Nokia has made investing in future mobile "disruptions" one of the pillars of its business strategy.
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Nokia reported net cash on hand of $5.8 billion at the end of 2012, up from $4.75 billion at the end of September. While the $5.8 billion figure is down 22 percent from the end of 2011, Nokia's position improved due to cost cuts and a brighter financial picture at Nokia Siemens Networks.
As part of the announcement, NGP also said it will expand its presence in China, with the appointments of David Tang as managing director and Lu Guo as principal. Tang previously served as vice chairman of Nokia China, while Lu was responsible for mobile and Internet investments at Keystone Ventures, according to Bloomberg.
Nokia has made pushing into China a key part of its strategy with its Lumia Windows Phone line. The company recently struck a deal with China Mobile to sell a Chinese variant of its flagship Lumia 920 smartphone, the 920T. China Telecom started selling the CDMA-capable Lumia 800C last April.
Read more: Nokia to pump $250M into mobile venture capital fund - FierceWireless
Venture capital is very risk. And this company that has a supposed "sure thing" in selling these damn phones is out there gambling its money. Has that extremely high R&D spending over the last decade returned anything? Has an iPhone killer come out of it? They had to buy their OS from MSFT? Wow. From the laggard of all software companies.
Can anyone quantify the return from the tens of billions of dollars invested into R&D over the past decade? A mobile phone that looks like a bigger fatter plastic iPhone? Is that what came of it all? And some drop in the bucket royalties. I've seen this company talk about flexible phones and seen all the cool renderings. But what they put out after all this R&D was bigger, fatter heavier iPhone looking thing whose one innovation is built in wireless charging.
And they still want to gamble on startups? They should gamble on themselves first just like its shareholders are doing.
It would have been better if nok pumped that money into improving production of lumias and adding a few exciting ADs like samsung's. Then we will eliminate shortage problem and increase awareness among smartphone buyers. Many people here in the USA have no clue that nok makes such beautiful phones like the lumia 920. If you don't believe me, I challenge those of you who own one, like I do to check with people you know if they had any idea nok made such beautiful phones and they will tell you truthfully NO, cause they have never seen it being advertised. How can you be successful in marketing a product without good ad's and without making enough of the phones to sell? This does not take marketing genius to figure out, except for the stupid and continually challenged nok managment.