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
I’ve been saying that since the 11th.. the whole “deal” doesn’t make any sense otherwise. Microsoft know what they are doing, and if they get Nokia Mobile for 19 large, I would applaud. It will be a very sad day for us, the consumers, but it doesn’t take away anything from the brilliant move they pulled on Nokia
they could easily buy a portion minority or majority of Nokia, they needn’t buy the whole thing
The move from meego and symbian, certainly doesn’t make sense at all, unless, you take into account a few things.
1. navteq, Microsoft does want this and it was one things that will power bing maps.
2. Hardware, nokia is no one in that area.
3. Marketshare, nokia currently has about 25% if MS brought nokia now, it would face major hurdles with the regulators, by q4 or q1 of 2012 at this rate nokia’s share will be down to 10%. Would it pass regulators at that stage probably.
4. $41billion overseas cash that Microsoft won’t bring back into the US as it has to pay 30% tax on it
thats $12 billion in tax. Buy a company or two (buy skype instead of paying its US tax bill) …
Nokia next.
Nokia no one in hardware? Are you nuts? They’re renowned across the planet even by hardcore iPhone and Android fanboys as having by far the best hardware on the planet.
I think you need to read that as no. 1
he needs to f*ck off!
I really don’t like these exaggerated titles. As Eldar said: “…to buy A PART of small phone vendor…”. A part, not the whole Nokia!
The only part of Nokia we’re concerned about here is the mobile division. This is the division that Eldar is referring to.
Noone, not one can deny that devices and services division within Nokia is its bread and butter. So no, this is not exaggerated.
Devices and Services that i guess we are talking about here is the absolute heart of Nokia that has not lost money in 14 years(the one quarter Nokia lost money in 2008 was because of Navteqs -1.2 billion). Devices and Services have been making huge profits all the time while NSN and Navteq have not.
19 billion sounds like nothing for that part of Nokia, but who knows in 5 months time.
NSN got 50% of Nokia’s workforce(around 60 000 people).
And I thought The featurephones are the “bread and butter” of Nokia. The certainly sell a lot of those.
Without their smartphone section, Nokia as a company is unprofitable. So yea, smartphones ARE their bread and butter.
Part could also mean part of shares, 30 % is a LOT. You dont need half to make decisions.
Part doesn’t have to mean some division etc.
shareholders might not be interested in a buyout but they have no qualms in having a knowledgeable, prestigious, shareholder such as Microsoft
so I wouldn’t be surprised if they stepped into ownership by first buying a share of Nokia be it minority or majority but… eventually? we all know where it’s headed if its true
I personally do not really care of Nokia any more. They screwed up things 5 years ago and that’s it.
MeeGo phone will be their last product that is even bit interesting product and even it will never get much spotlight.
Picture is spot on. MS is EVIL and every company they touch will go down eventually.
[...] Fuente Tweet [...]
Ok, it’s one of Eldar’s “insights” that might or might not turn out to actually happen, but lets go ahead with the assumption that there is something to it.
_IF_ MS buys smartphones off of Nokia that would still leave two of the three main parts of the mobile strategy left, “Future disruptions” and “The next billion” right?
Would MS be interested about only “Smartphones” part, without the R&D on “Future disruptions” ?
Would we then have S40 + MeeGo ( + QT ) based Nokia left? The way it was planned to be?
With ~3 factories of their own ?
MS buying only part of Nokia does sound more probable than buying the whole thing, since selling a small part is something the board can do with acceptance of shareholders general meeting. This would mean board + > 50% shareholders that show up in the meeting, would accept the offer.
Buying the whole company would need 90% of shareholders accepting the offer before MS could force the rest to sell.
Still I can’t see it to be too likely, even that they would buy a part. The reasons are known, mainly the major change to MS’s strategy in this case, from software vendor to a hardware vendor and risking support from other manufacturers.
p.s Oh yeah, and MS has already bough one phonemaker, Danger. You know, the one that _used_ to make phones
By years end, the plummeting stock value of Nokia shares means that M$ could do quite well and get a bargain. If M$ is prepared to spend 8.5B on Skype then another 20B on hardware facilities to put WP7 and Skype on makes total sense to me. It’s not like they do not have the funds and they well know that their desktop cash cows will not survive another decade so buying Nokia, at least the smartphone division, could be one viable long term goal. It would explain Elops intent to destroy current Symbian sales asap to ensure a good buyout price for M$ by the end of the year.
It all fits together…really sad.
Elop is doing his best to kill the old Nokia.
Remember Sendo anyone?
Just the first wblink I´ve found…
http://www.theregister.co.uk/2003/01/06/microsofts_masterplan_to_screw_phone/
I actually am starting to believe this. Microsoft is gonna buy smartphone division of Nokia (if there is a smart phone division) and Nokia can start building what’s left up. With Symbian and MeeGo. Makes sense to me. Honestly, I don’t like Elop and I want him out of Nokia. And the best way to get rid of him is if MS buys a portion of Nokia and manages that small portion away from Nokia.
Only this Nokia division he´s taking with him is holding all the patents know how and production sites. Good luck building up everything from zero!
Microsoft also wants navteq!
What a BARGAIN! Yeahahaha.
What do you all think of this reply I got tonight?
From: David Einhorn
To: [Me]
Sent: Tue, May 31, 2011 6:59:43 PM
Subject: Re: Urging Microsoft’s board to acquire Nokia near its current firesale price
Thanks for sharing
Best,
de
well if you actually know “David Einhorn”..
please note this …
“On May 26, 2011, Einhorn called for Steve Ballmer, CEO of Microsoft, to step down after Microsoft had been passed by both IBM and Apple[15] in market value.[16]”
With all the money they have spent on skype and various other companies – it would be stupid to throw away half of their capital on a company that’s rapidly losing value and market share.
they would have to downsize nokia if they bought them to turn it back into a profitable business for them..
I’m sure Ballmer might want this – but Microsoft’s board, i doubt it
Just to do a good read and know reality
http://communities-dominate.blogs.com/brands/
@markc I agree with you 100%. The moment i read Elop’s burning platform memo, I knew what was the plan…
so its the end.. its ok .. but 1 thing i need to nokia.. update the firmware of symbian3 to the max..
“Could spend” or couldn’t?
I dont listen to Eldar anymore. And I don’t believe him as long as he can’t show us any sources. Not showing sources is just not serious…
actually the readers of this blog were informed about that way before others
spybond says:
February 26, 2011 at 10:52 am
rumor has it that a big thing will happen around years end.
things will start becoming clearer by late august 2011
mynokiablog.com/2011/02/26/video-windows-phone-advert-shouldnt-you-have-one-yes-you-should/
that eldar dude is a joke
I can tell you Nokia’s board will be lynched in Finland if that happens.
Hope so…according to their actions taken thus far they didn t do their job right…Resign without any cent of salary would be the right move for them…
HAHAHAHAHAHAHA
Why the heck Andre spreading cheap Eldar’s rumors?
Eldar was harshly and brutally raped in Moscow’s prison last year so you cannot take him seriously when it comes to Nokia Eldar butt always hurts!
wow the news hit the BBC
http://www.bbc.co.uk/news/business-13619601
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I think this piece of “news” should be refiled under the “alarmist” category. It’s sad because the continued proliferation of these wild speculations only serve to harm Nokia by driving down confidence in the company, especialy among shareholders.