Weekend Read: Why Microsoft Shouldn’t Acquire Nokia

| June 23, 2013 | 20 Replies

microsoft-nokiaLast week we heard a bunch of stories/rumors regarding potential buyouts of Nokia; namely from Huawei and Microsoft. When the story of talks between Microsoft and Nokia fell through I felt something was off, especially since Microsoft didn’t seem to gain anything from purchasing a company that was already 100% committed to their platform (and doing more work then they themselves were doing). Here’s an interesting read on a couple reasons why Microsoft’s buyout of Nokia doesn’t sound reasonable, with some very good points. Mainly why would Nokia agree to only sell their devices decision and not the whole company? Especially as pointed out that it would be cheaper for Microsoft to buy the whole company flat out.

http://seekingalpha.com/article/1516012-nokia-microsoft-too-early-for-an-acquisition?source=yahoo

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One good thing from all these rumors, is the fact that it has helped surge Nokia’s stock prices (currently $3.93/share); so we thought we’d do our part and help our beloved company by putting in some rumors of our own :P

Thanks for the tip ms.nokia

 

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Category: Nokia, Windows Phone

About the Author ()

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.
  • char aznable

    They shouldn’t. What a disgusting company who thinks they can shove what they want to the masses. Xboned.

  • ms.nokia

    roflmao

    Go MyNokiaBlog buy Nokia, i pledge $1 to the effort, now only another $14,999,999,999.00 to go and its done.

    always new Michael was sent to buy out Nokia and switch it back to symbian :D

  • BellGo

    I don’t think they have a reason to. They get everything they could want from Nokia for free. They would probably make an offer, if some other company would try to buy Nokia, though.

    • GordonH

      +1

    • jiipee

      There are at least different reasons, why MS would consider that purchasing Nokia would be necessary:

      1. Some other party makes a bid andöMS wants to secure WP
      2. Nokia plans to adopt Android or other OS alongside WP
      3. MS sees that the cooperation is not fast enough and they want better sw & hw integration, especially on planning wp forward in terms of hw. This is how Ballmer presented logic for surface and Ahtisaari N9.

      Then there are reasons from Nokia:
      a. They dont see that they dont have enough volumes to compete and cash for investing in growth
      b. There are other more lucrative business areas and they consider smartphone market less appealing and fully served. The push by Chinese manufactuters destroy margins
      c. Nokia considers that best ROE can be achieved via selling licenses to their tech (eg. radio, pureview) and offering apps

      I dont really believ that Nokia would sell smartphones before Q3 results presentation. If Lumia is a big success by that time (Nokia is back in top 5 manufacturers) then they can continue in the business. If not, then the only party interested would be MS.

      Good thing is that it is already end June, which means that there wont be profit warning for Q2. The negative is that they estimated that with 27% growth QonQ they still have make negative or zero profit.

      • Janne

        Profit warning – positive or negative – can come even after the end of quarter, though.

      • Capedonut

        Good analysis, btw, when do they usually release profit warnings, if they are to come?

        • Janne

          Nokia has a history of profit warnings around 10 days after the end of a quarter, we might still see one around July 10-11th. Or not. Not saying one will come, just saying it can come before the quarterly report around July 20th…

          One company in Finland made a profit warning one day before their quarterly report, but got slapped for it by the stock exchange. Legally they need to warn as soon as they know their guidance is wrong or other grave things happen, but in reality large companies warn often quite late because it takes time to tally all the fiscal reports etc.

          • Capedonut

            With two high end phones out quite late in the quarter , one would assume that there could be some uncertainties yet regarding the result

    • swain

      Yeah…You are right.
      That will be end of WP if anyone else buys nokia. May be then MS will have many decades of free time to develop and surge WP.

  • Stoli89

    There might be one good reason why MSFT would wish to buy Nokia at this time, for the right price. MSFT sits on billions of offshore dollars that would be subject to corporate income tax upon repatriation. If MSFT were to buy Nokia, even at a healthy control premium to the current discount to book value, it would not only be getting a series of valuable assets with excellent cash-flow prospects…it would be optimizing its corporate tax exposure, significantly.

  • http://xlr chandan

    Google should buy Nokia

    • Ady

      You just made the idea of MS buying Nokia not look so bad now.

      • Ed

        Indeed.

  • Janne

    I consider this purchase bid mediocrely real! ;)

    • Sefriol

      But I already bought Nokia last summer : (
      Less than 2€ price made it easy.

  • tiyo xi

    yaa google buy nokia please or yahoo buy nokia please they will ₹\_/çk* ms till getin faint

  • dss

    MS will buy Nokia when the time is right..

  • ADN

    Nokia is not for sale
    Nokia will change its main OS before 2015

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