Microsoft Was Talking With Nokia Regarding a Buyout, No More Though

| June 19, 2013 | 206 Replies

DSC01507Hot on the heels of Huawei saying they’d consider buying Nokia; then changing their minds all of a sudden; new details have emerged showing that Microsoft was actually talking with the folks at Nokia regarding buying out the devices division of the company. Apparently the deal fell through sometime last month after Nokia asked for too much money:

The two were actually quite close to striking a deal and were having “advanced talks” in London as recently as this month. But, according to the all-too-familiar “people familiar with the matter,” those talks have broken down. Those same sources say it was Microsoft that walked away from the table over concerns about Nokia’s asking price

This is actually quite surprising to me seeing how the ideal time for an acquisition would’ve been a year or two ago, but now? What would Microsoft gain from buying Nokia? THey already have them pumping out great hardware dedicated to their OS, in fact the way I see it Microsoft has Nokia supporting them for next to nothing at the moment, why change that? Unless they feared Nokia switching away from WP… Interesting stuff.

Via

 

Category: Lumia, Nokia, Windows Phone

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Hey, my name's Ali- Currently a fifth (and final) year Dental Student from Chicago; studying in Jordan. I love all sorts of gadgets almost as much as I love my cookies! Be sure to follow my Twitter handle @AliQudsi and Subcribe to my Youtube for the latest videos - no pressure. Thanks.
  • Prasenjit

    Nokia will merge with micrososft you like it or not and Asha will continue for some short time and then a restructuring will foloow….

  • BrianT

    Everybody talks about Apple’s $150 billion cash mountain, well, MS has something like a $50 billion pile. If I were them I would, as a first step, build up my stake in Nokia shares to the limits allowed by the regulations. In the UK I know this is 29.9%. In Finland it is probably different.

    In any case something like a 20% stake would go a long way towards guaranteeing that the #1 Windows Phone manufacturer stays out of other harmful (from MS pov) hands and could be a useful launching pad for a full takeover at a later date if required.

    • HappyL820User

      I think in Finland they would have to make an announcement as soon as they own 5% of the company. The same thing after 10% and maybe 20%. That would of course raise the share price a lot and make Nokia much more expensive.

    • Viipottaja

      Exactly. MS investing in Nokia is MUCH more likely than them even trying a complete buy out.

  • Prasenjit

    Let’s be honest Nokia’s Symbian was dying but Nokia always had the choice to join Android teh wining ecosystem.

    Nokia differentiates through industrial design, colours, hardware , camera and exclusive camera + mapping apps. right these are Nokia differentiators. now tell me if Nokia can succeed with these differentiators in WP why could they not do that in android. Nokia is never known for latest quadcore with 8Gb specs people love Nokia for exactly these differentaitors ask any one why you bought a Nokia ? because of camear, build qlty or call qlty or exclusive apps or their brilliant design heritage. Yes Nokia symbian on N97 may have sucked but not the design Nokia has since day 1 been about awesome tasteful elegant european design.

    Now, see Nokia is a leader in hardware they can slap any OS and sell but what would have happened to WP… today it has 3.2 % and growing but had Nokia gone Android it would be dead now.

    The point with not going the Android route could have been only IP problems with Android but I never trusted that Nokia can not differentiate in Android any one who tells that is stupid and lying, Google would have not asked Nokia to put HERE MAPS, Nokia could have shipped HERE with Google and let people play just like BING ZUNE and Nokia apps. HERE monetization could have come by supplying data to other OEMS, CAR brands the way they do now.

    it will take 2-3 months for Nokia to mov eto Android but what will MS do ??? WP will plunge back to death.

    Mind it dear friends LUMIA is a bigger and more known brand than the Windows Phone Brand.

    Micrososft has a brilliant OS but they need to do marketing and rather than sitting idle on those 66 billion dollars they better start marketing otherwise I am sure.. Elop will himself move to Android (2 pc chance ) but ruours are plenty Nokia alraedy playing around with fire fox OS HTML5 does that rings any bell guys ???

    CONCLUSION: NOKIA SAVED WP ECOSYSTEM, SO MICROSOSFT YOU ARE T BLAME.WHEN EVER SOME ONE SAYS OH NO I AM NOT GOING TO BUY NOKIA THE RAESON IS NOT NOKIS STINKS BUT THEY DISLIKE THE OS.

    the simple eason is not so hard to see, people love pureview and Nokia but still dont buy Lumia because of Windows Phone OS, so now if any one here is normal IQ guy tell me isn’t it Microsoft to blame that miilions of people dont like tehir OS.. whose job is to create teh brand awareness for that???? I guess its MSFT

    • Cod3rror

      You know what, it’s sad for a company like Nokia to go out like this.

      Too bad it’s filled with absolutely morons, sell outs and saboteurs.

      Should have gone with Android, it was perfect for Nokia. I would’ve seriously considered switching to an Android EOS.

      • jiipee

        Agree you both.

        “could have been only IP problems with Android” I dont believe they would have had any problems regarding IP with their IP portfolio, just cross-license deal.

        Nokia could have done both. Take the patform support payments from MS, who would have wanted WP to survive. WP would have been better suited for corporate segment than Android. Another options would have been MS taking over either Blackberry or Nokia with their piles of cash.

        • Joe

          Nokia doesn’t have the resources to support two major operating systems. Microsoft is also not going to pay Nokia 1 billion dollars a year if they were going to make Android phones as well. They would be stupid to do such a thing. In fact, Microsoft would likely go the Apple route and not even allow Nokia to use WP8.

          • JGsmartypants

            Nokia is so valuable to windows phone that MSFT could be paying them to build WP while Nokia is free to make other phones, that way only Microsoft suffers for their idiotic mistakes (Skype video messaging being the latest of many)

        • Joe

          By the way, Nokia would already be bankrupt if not for Microsoft’s money and Microsoft’s support.

      • Joe

        Another idiot touting Android as a savior. If Android is a savior, then why is every Android OEM not named Samsung struggling and losing money? Oh wait, I thought it was a savior.

        It’s going to be funny seeing Nokia go bankrupt trying to sell Android phones, and it may happen yet.

        • JGsmartypants

          Even the struggling ones are selling more phones and making more money than Nokia with WP. the “nobody makes money with android” argument is for liars and idiots who believe them.

    • Viipottaja

      “it will take 2-3 months for Nokia to mov eto Android”

      No. Well, unless they want to take stock Android and all of Google apps and at least temporarily just drop Nokia Maps and the other apps and services. Even this crazy scenario it would probably take at least 6 months to get the first device out.

      • GordonH

        Stop the lies. Nokia maps can be included in Android.

        • capedonut

          Of course they can include it, but there’s a limit to how deep it can be integrated, without losing access to google services like playstore

          • That was a random Noki

            Yes, Nokia can’t replace Google Maps. They could add their own set of maps as an application but when some downloaded application wants to show map data, it would be using Google maps. Nokia just can’t change that without losing access to the Play Store.

            You know and understand that, but it’s really weird how some people like GordonH just ignore the truth.

            • GordonH

              You guys just blindly support your employer . Let me give you an extreme example ” Kindle” .

              • jiipee

                Technically, Kindle is not Abdroid.

                Still, I quite agree with you that similar approach would have been one option. Or teaming up with Amazon.

                Could Nokia offer dual-boot?

                • Random Random

                  It could have been an option but a very risky one. Probably a better option than Meltemi but still a risky one.

                  Offering a dual boot devie would definitely result with a niche device.

              • Random Random

                Sure, and it doesn’t have access to Play Store people seem to want from an Android phone. Now wait? It’s not a phone.

                Have you ever thought why Amazon can sell that device? I’ll help you with truth.

                Books.

          • JGsmartypants

            The solution is to do what amazon did. Fork it and use your own store to escape Google Play restrictions

            • Capedonut

              Selling an android device without access to playstore would be counterintuitive . Amazon can do it, but they have a different business model, and also as mentioned above they don’t sell phones

              • Random Random

                Very true.

                These people praising the Amazon business model like to forget what Amazon does and the fact that they are not selling Android phones.

                Nokia was just pretty low on choices.

      • Joe

        It would take a year at least. You don’t just slap an OS on blank phones. It’s a far more involved process than you apparently believe.

  • StefanH

    There are two possibilities here:

    1. Microsoft approached Nokia, Nokia didn’t say no outright to their close partner and they talked. Nokia wanted more than Microsoft wanted to pay, end of story.
    2. Nokia approached Microsoft, but talks faltered.

    Version 1 makes (kind of) sense, Version 2 worries me, because that would mean that Nokia is actively looking for someone to buy them (or at least part of the company). Have there been leaks about how talks started? (And then of course there’s the Elop-as-a-Trojan conspiracy theory version 3 which I personally think is ridiculous.)

    I also think it will be very interesting to see what will happen to NSN – if Siemens leaves but Nokia stays or even buys Siemens out, a complete Nokia takeover would be a bit more unlikely than it would be without NSN.

    • Janne

      NSN is indeed an interesting question. We’ll see how that plays out.

      • StefanH

        I just thought about another scenario (and, of course, all of this is speculation): Maybe Nokia is indeed planning to buy Siemens out of NSN but doesn’t have the money to do that. And maybe that’s the reason they were in talks with Microsoft: MS buys Nokia’s handset business, effectively ending Nokia’s time as a handset maker and Nokia becomes a Networks company similar to Ericsson.

        Only that plan didn’t go through.

        • Janne

          That one crossed my mind last night too.

        • ms.nokia

          maybe Nokia can put itself in debt and buy out Siemens, then Nokia would not be such a good takeover target.

        • Viipottaja

          Very unlikely. It is much more likely Nokia will eventually leave the network business and concentrate on devices, than the other way around.

          Regarding NSN, yes, it is possible Nokia is trying to put together the financing to buy Siemens out of the JV. In fact, it is known to have looked into it with some investment funds.

          • StefanH

            I read about that too, wasn’t there talk about a Finnish state fund (“Solidum” or something like that) possibly providing the money for that and the fact that this construct would go against European rules on financial help from countries? I believe I read about that in a German newspaper, maybe someone here can shed some more light on that.

            I figured they stopped looking into that after that deal with Solidum (sp?) proved to be impossible.

            But well, if Nokia were to exit the networks business, now would be a good time – why would they still be looking into buying Siemens out instead of just searching for a buyer together with Siemens?

            • jiipee

              I dont see why Solidium couldnt buy a stake in NSN. There are several examples where government has purchased a significant share. There would be other problems such as political issues related to governance.

              • StefanH

                I believe governments need clearance from the European Commission in these instances because a large public stake in a company has an effect on market dynamics.

                And of course there’s political issues in Finland as well – how is Solidium organized? Do they need clearance from parliament or the Finnish Finance Ministry for such large investments?

                • jiipee

                  I dont think that they would need clearance. First, they would probably buy a minority stake. Secondly, ownership itself is not an issue, giving any kind of priority or preferance over others is. There are cases eg in the shipyard business, where the French government bought a stake in a French shipyard. Direct subsidies would have been an issue, not ownership.

                  • StefanH

                    That sounds plausible, I think you are right. We’ll see how all of that will play out …

                    • jiipee

                      We’llsee.HopefullythereisagroupofinvestorssothatNokiamaintheirmajority

                    • Janne

                      jiipee:

                      Whoa! You are taking this merger-business seriously! ;)

                    • jiipee

                      I wouldnt say seriously, it is interesting.

        • Janne

          Something cooking?

          Nokia board meeting yesterday and today?

          http://yle.fi/uutiset/nokian_hallituksella_valmius_paatoksentekoon_-_kokoontui_eilen/6698816

          Making some big decisions? YLE speculates about NSN, but other decisions are possible too.

          • Viipottaja

            Don’t they meet say on a monthly basis anyway? But sure, I guess they may be making some big decisions.

          • jiipee

            It could be that it is an ordinary meeting. Nokia has had their Summer party at the same timeafter all.

    • Prasenjit

      First one has 99.9 % probability in no ways Nokia will ask soem one to buy it out like a whore in a APris bar it’s Nokia they are fighters they will fight till the end. and that whatmakes Nokia rock..

    • capedonut

      If you look at the wsj article, it seems like Msft approached Nokia, but then again it’s hard to know for sure

      • StefanH

        That’s what I figured, but it’s really not easy to tell …

  • ummNo

    [stupid comment]
    So… Tinfoil-hatters and Murtazin were right?

    Tinfoils: 1, Sheeps: 0

    “This strategy is right one, Nokia will rise like Phoenix bird from burning rig.”
    -Sheeps

    “You suck, you’ll sink, you are alone.”
    -MS

    But yeah, great to see, that buying Nokia would be bad deal for MS because Nokia uses (only) WP (on smartphones). Great “ecosystem” you got there.

    Elop will leave Nokia by the end of the year?
    [/stupid comment]

    “Do not feed the troll.”
    -Anonymous

  • Prasenjit

    Nokia should consider hiring Scott Frostall and making a location aware OS right into the heart of the OS with full LBS integration.

  • robin

    Thank god stay independent nokia :D

    • http://www.jolla.com xerxes2

      Nokia hasn’t been independent since Elop was moved from MS to Nokia. Nokia basically is a MS subsidiary nowadays, bought for $0. Why else would the WP only madness continue? Only one company profits from that and it ain’t Nokia.

      • Viipottaja

        Ya ya, well articulated and substantiated.

        • jiipee

          If one looks ay the gains, it is clear that MS has made money or savings and Nokia has not really benefited so far. It depends fully, if Nokia starts to sell in big enough quantities. So far,
          - MS has gained access to Nokia licenses (it could be that they had full cross-licensing deal before)
          - MS does not seem to pay any extra on mapping solutions, which are now used accross MS ecosystem. The annual cost is approx 1 billion to Nokia to maintain that organization and close to no profits and loss without internal sales
          - MS has received software support from Nokia to develop WP as stated by the contract and Elop
          So far Nokia has made some savings from softwate development: more from Sbian which would have been laid into grave in any case.

          From MS point of view there is no need to buy out Nokia unless someone else tries it first.

          I dont consider that Nokia or Elop has done the above deliberately. They just made huge mistakes.

          • Janne

            jiipee says:

            Elop has done the above deliberately

            Stop the allegations, jiipee!

            / ;)

            • jiipee

              I wont before the first book(s) arrive. Sadly, it may be as late as 2015.

            • jiipee

              There is a paragraph here ( http://www.frankbuytendijk.com/Balanced_Scorecard_Report_B1009A.pdf ) that summarizes well, what I think of Elop. First page starts with “Western management culture abhors dilemmas…”

              I saw this guys key note speech few years ago and asked him to use Elop as an example, when we see the results ;)

              • Janne

                Quick glance at the paper reveals interesting thought, thanks for the link.

                Of course life isn’t really that simple – you can’t say creating options is always better than not. Sometimes options turn into fatal indecision.

                But yeah, we agree Elop went too gung-ho on February 11th. That, at the very least, should have been handled different. Too much damage in a day.

                They could have announced and executed differently.

                Final thought: What is OPK had really left Nokia in a dilemma?

  • sks

    If MS sits on its lazy ar.. and WP remains stagnant with no innovation, like what it is as of now then Nokia might want to buy the WP OS division from MS? I have a feeling it might happen because Nokia is a WP only system and they might be left with no options, MS can say tata bye bye and still make it through but Nokia cannot, bad position to be in, pity…

    • Viipottaja

      This notion that MS would just drop mobile is just utter nonsense, IMHO.

  • http://mynokiablog lakay

    agree…

  • Peter Sellers

    “in fact the way I see it Microsoft has Nokia supporting them for next to nothing at the moment, why change that? Unless they feared Nokia switching away from WP”

    Yeah why on earth would Microsoft buy Nokia. Nokia is already their b*tch that sells their crap, without a care in the world about making an actual profit.

    This whole thing’s a joke. Wake me up when Elop is fired and Nokia makes an Android phone.

    I’ve been itching to buy a Nokia phone again, but I’d scratch my eyes out if it came with Windows Phone.

    • That was a random Noki

      No, Symbian was a joke. Losing unit sales in high end and mid range. Shrinking profits and Nokia was on the way to losses.

      Nokia fans and employees were claiming even in 2010 how Android was crap so it was not an option. Today it’s easy to say it would have been better but back then Nokia fans and employees considered it as something Nokia was not able to use.

      At least WP is so much better than Symbian.

      • GordonH

        You forgot symbian was dumped already and to be replace by Meego. Instead we got the fancy lie that Meego was not ready and Nokia had use a weak WinCe Os which was worse cause Ms dumped WinCe too.

        • Random Random

          MeeGo was not ready. They shipped it with tons of features missing and without any real migration path from Symbian.

          Yes, I know the lies you like to spread about the migration path, but in reality there was very few Qt applications to be migrated from Symbian to MeeGo. Writing new applications to be ported is not migration.

  • Prasenjit Singh Bist

    Investors should seriously question Nokia leadership if they are interested in making profits.
    we want results now though i agree with Elop that its hard to change the course and too foolish when you see momentum building up around the Lumia product line. Also some people should understand that it is impossible for any company to sell and promote 2 different competing operating systems no one does that successfully as a brand you will fail to make a convincing story

    either nokia sud test a little more just 2 quaters with Windows Phone else go all out on Android, as some one above posted with stock android it should take 6 months i dont agree android is far more standardised and you can just define the specs and get them from any supplier with full open source drivers. Nokia already works on android versin of here maps and for anything that misses they can provide updates later.
    Nokia’s simple android announcement with a fabula design happy colours pureview camera is enough to create hysteria in android world and keep in mind no other android oem even Samsung lacks this differentiators. It will really take 2-3 months

  • Prasenjit Singh Bist

    One point why is Nokia so much worried with siemens leaving as its Nokia who has controlling stake.

  • GordonH

    In other news we here about HTC slashing executive pay. If only Nokia had done it earlier … still not to late to slash most Nokia executive’s pay.

  • bogdo

    Anybody claiming Nokia should go android is clearly not paying attention to anything in mobile

    • Brian Stephens

      Yes, because it is a better idea to lead an OS that has 3% market share and to lose billions of dollars in order to capture that market :)

      • Random Random

        It actually is a better idea to do that than try to succeed with Symbian or MeeGo.

        Symbian and MeeGo were destined to fail.

  • Prasenjit Singh Bist

    I have a feeling that might be we see Nokia selling its mobile devices business to some Chinese folks just like the 2004 IBM Lenovo PC deal.
    its bound to happen there are indications of that ZTE and even some indian brands are looking at that opportunity.
    it will include factories, patents and employees.

    so that effectively leaves Nokia with smart devices aka Lumia Here Maps and NSN. I just can believe Nokia getting out of NSN its profitable fits with possible survival of Nokia as an independent entity and NSN leadership in next gen technologies.
    NSN is not so easy to sell either as Chinese firms wont be allowed and no other netwok company will think abt investing that insane money ericcson alcatel cant afford and apple msft or others are not in that business.
    i also feel the sentiments form ex nokians and folks that days for Elop are over so his role was to sell Nokia in parts but don’t blame him the board that hired him wanted to do that and that’s why the whole organisation was veared towards producing WP devices effectively killing other efforts as the intention was to sell it to MS or offload.

  • Brian Stephens

    MS don’t need to buy Nokia. Elop has ensured that Nokia will do everything that MS ask of them at no cost at all. In fact, Nokia will destroy their own platforms in order to ensure that Microsoft are a success! You can’t ask for more than that, self-immolation!