Eldar Murtazin strikes again – Microsoft to acquire Nokia by end of 2011?

This is going to be filed firmly under the rumour section until further notice but the following tweet sparked a bit of interest from me.

“One small software company decided last week that they could spent 19 bln USD to buy a part of small phone vendor. Thats it.” – Eldar Murtazin.

Now on first glimpse, the words small company and 19 Billion do not match up, at all. In fact, Eldar himself admitted later that it was a bit of “irony” on his part.

A bit of research would indicate that of all the mobile companies on the stock market today, few  among them would warrant a 19 Billion USD outlay. Of the possible candidates, RIM, HTC and Nokia are the only really viable options. Looking at HTC, they’ve been a rather important player in the Android space and likely have certain contractual obligations with Google, somewhat precluding them from consideration. The other two, RIM and Nokia were once the biggest players in the smartphone market and are now seen by many to be on the outs. Looking at RIM and their take on things , stubbornness and determination to forge their own path; failure be damned (something I both admire them for and laugh at),  I can’t envision them being the target.

As for Nokia though, with Symbian effectively being given its death sentence and date (whether it’ll even live to see that or not is debatable), MeeGo being  more or less dumped as a viable smartphone option and Nokia’s increasingly tight relationship with Microsoft, they could certainly be the “small phone vendor” in question, albeit 19 Billion sounds like a ridiculously low sum (In my opinion at least).

Having thought through all of this rather quickly I started a bit of the discussion with Mr. Murtazin where he revealed a bit more information on the supposed discussions.

For one he says the deal should be at least discussed and/or closed before the end of 2011. Massive strides don’t you think?

I asked quite a few questions of him in the time he gave me, some of which I’m sure he’s not privy to information about.

1. Why is the price so low?

2. Do they intend to buy just the smartphone division or will this be the ENTIRE mobile division?

3. What of the intellectual property that Nokia owns and the related income?

4. Will Nokia become like Skype, an autonomous division within the Microsoft umbrella?

5. Why would Microsoft take such a risk?

6. How would Nokia as a company possibly benefit from an acqusition?

7. Who initiated the discussions?

8. What will happen to other OEM’s and their Windows Phone ambitions?

9. Will Microsoft be taking over manufacturing too or will they control design and engineering only?

The only questions Eldar could answer satisfactorily (In my opinion) concerned the other Windows Phone OEM’s who are unlikely to flee in droves due to their contractual obligations to Microsoft and that Microsoft would likely take control of at least 2 manufacturing facilities

Here’s what I think. Microsoft, based on their already obvious attempts to control the experiences on their mobile devices (much like Apple) would love if they could produce their own devices. They’d love to buy a company capable of doing just that if possible but it’d likely be a risky move and one that could be fraught with missteps. Microsoft have thus discussed internally and concluded that they could possibly spend as much as 19 Billion USD on such an acquisition which would account for nearly 50% of their cash at hand (after the Skype acquisition of course). Whether they’ll actually go through with it will probably depend on information and details about the two companies that I’m clearly not privy to.

Personally, I doubt such a move would come to fruition but at the same time, I wouldn’t be entirely surprised if it did. What do you think will happen to Nokia come Q1 2012?

Thanks hmm for the tip.

Credit to Engadget for the image

Category: Nokia