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Nokia phone demise a warning for all tech giants

The precipitous fall of Nokia phones sends a warning to all technology giants. Microsoft finally ditched the basic handset business in a deal that will see the devices reborn under the control of former Nokia bosses and Taiwan's Foxconn. The $350-million sale price for the former crown jewel of a $300-billion enterprise is a testament to how quickly empires can vanish.

Nokia dominated the mobile-phone market at the turn of the millennium. It sold about a third of all such devices and reaped record profits while smaller rivals struggled. The Finnish firm's position looked nearly impregnable - until Apple introduced the iPhone in 2007. The market turned against Nokia's dated offerings, and the company sold its handset business to Microsoft for $7.2 billion in 2013.

Microsoft couldn't halt the slide, though, and wrote down most of the purchase price last summer. Now it's essentially closing the book on the fiasco by selling the basic-phone business and promising to "support" Lumia, the smartphone brand Microsoft developed with Nokia.

Foxconn and the other purchasers are betting customers have at least some fond memories of the Nokia brand. They have licensed the name and plan to use it on tablets and smartphones they manufacture.

The company now known as Nokia has, meanwhile, survived as a provider of phone antennas and other network equipment. Though valued at some $30 billion, it's a shadow of its former self. It is the successor to the entity that merged with telecommunications firms Alcatel and Lucent. The three companies were worth a total of more than $700 billion 15 years ago, before they combined.

Most investors and tech executives are well aware that today's behemoths can disappear, no matter how impregnable they may seem. Hordes of nimble start-ups are constantly nipping at their heels. Apple stock, for example, trades at a roughly 30 per cent discount to the S&P 500 Index, largely because investors see a risk of the iPhone becoming obsolete.

Alphabet and Facebook, meanwhile, are plowing money into moonshot projects that they hope will keep them rejuvenated. It may take those sorts of investments - and a healthy dose of paranoia - to keep rivals and age at bay a bit longer.