(Left) Microsoft CEO Steve Ballmer, Nokia’s Canadian boss Stephen Elop. (Reuters)

Helsinki, Sept. 3 (Reuters): The sale of Nokia’s handset business is not the first dramatic turn in the 148-year history of a company that has sold everything from television sets to rubber boots, but it was taken as a hard blow in its native Finland.

Nokia’s Canadian boss Stephen Elop, who ran Microsoft's business software division before jumping to Nokia in 2010, will return to the US firm as head of its mobile devices business — a “Trojan horse”, according to a disgruntled Finnish newspaper.

For many Finns, the fact that a former Microsoft executive had come to Nokia, bet the firm’s future on an alliance with Microsoft, laid off tens of thousands and then delivered it into Microsoft’s hands, was a galling snub to national pride.

“(Elop’s predecessor) Jorma Ollila brought a Trojan horse to Nokia,” widely read tabloid Ilta-Sanoma declared in a column. Ollila built Nokia into a global powerhouse but was blamed for being late to recognise the threat of Apple’s iPhone and the smartphone revolution.

“As a Finnish person, I cannot like this deal. It ends one chapter in this Nokia story,” said Juha Varis, Danske Capital’s senior portfolio manager, whose fund owns Nokia shares. “On the other hand, it was maybe the last opportunity to sell it.”

Varis was one of many investors critical of Elop’s decision to bet Nokia’s future in smartphones on Microsoft’s Windows Phone software, which was praised by tech reviewers but hasn’t found the momentum to challenge the market leaders.

“So this is the outcome: the whole business for 5 billion euros. That’s peanuts compared to its history,” he said.

Alexander Stubb, Finland’s minister for European affairs and foreign trade, said on his Twitter account: “For a lot of us Finns, including myself, Nokia phones are part of what we grew up with. Many first reactions to the deal will be emotional.”

Nokia’s new interim CEO Risto Siilasmaa painted a picture of just how grudgingly the call to sell had been arrived at, describing how the board had met almost 50 times after the approach by Microsoft as it explored alternatives to a sale.

Ballmer, at a news conference in the Finnish capital, sought to assuage fears the deal would hit jobs in the Nordic country and said Microsoft would build on the recent growth of Nokia’s flagship Lumia smartphones.

Nokia said it expected around 32,000 people of its roughly 90,000 worldwide staff would transfer to Microsoft.

It is also a pivotal moment for Microsoft, which still has huge revenues from its Windows computer operating system, Office suite of business software and the X-Box game console, but has failed so far to set up a profitable mobile device business. Microsoft’s own mobile gadget, the Surface tablet, has sold tepidly since it was launched last year.

The sale leaves the Finnish company with Nokia Solutions and Networks, which competes with the likes of Ericsson and Huawei in telecoms equipment, as well as a navigation business and a broad portfolio of patents, which will be licensed to Microsoft.

Analyst Tero Kuittinen at consultancy Alekstra said the sale price of Nokia’s phone business, about a quarter of its sales last year, represented a “fire sale level”, though others were less clear about what a shrunken Nokia was worth.

“What should be paid for a declining business, where market share has been constantly lost and profitability has been poor?” asked Hannu Rauhala, analyst at Pohjola Bank. “It is difficult to say if it’s cheap or expensive.”

Nokia is still the world’s No. 2 mobile phone maker behind Samsung, but it is not in the top five in the more lucrative and faster-growing smartphone market. Sales of Nokia’s Lumia series have helped the market share of Windows Phones in the global smartphone market climb to 3.3 per cent, according to consultancy Gartner.