Ronnie05's Blog

Is Nokia sell off to Microsoft scheduled for May 2013?

Posted in Mobile Devices and Company Updates by Manas Ganguly on July 4, 2012

Even while this is expected and anticipated, such a move would still create ripples.A couple of soft indications were provided by Eldar Murtazin. For readers who havent heard about Eldar, he has been watching the phone space and especially Nokia with a lot of interest for the past few years and was the first one who hinted at the movement towards Windowss Phone by Stephen Elop.

The details of the deal would get clearer in days to come. Nokia may have to break up its businessses – feature phone and smartphone and sell the feature phone unit to a buyer before merging/ getting acquired by Microsoft.

Last month’s  Windows8 announcement by Microsoft with a no crossover between Tango (Windows 7.5) and Apollo(Windows8) was a big confidence breaker for Nokia. A win-win for both Nokia & Microsoft

1. Micros0ft gets access to Nokia’s 30K mobility centric patents. The patent quagmire has gotten a lot ugly with the Apple injunction of Samsung Galaxy Tab sales in US. One can also see how Nokia is getting active in the patent space with the latest series of mild reminders to Google, that Nexus S transgresses Nokia patents.

2. After the sucess of XBox and Surface, Microsoft’s focus has taken a positive bias for devices as well. Nokia provides a very rich comptency in device experience

3. For Nokia, it means splitting up the low end and the smartphone and salvaging value. Nokia has been in a dead drop in terms of valuation for a while now.

4. If this works out for Nokia, it can create a second life for itself riding on the Windows platform and re-focussing only into smartphones as a path to profitability. In the past few months, Nokia has been on an overdrive to prune costs.

Nokia is the most invested of all Microsoft’s hardware partners in Windows Phone 8′s success, so this move makes sense. Microsoft is rumoured to have walked off from a Nokia purchase intent some time late last year. Between then and now, Nokia’s valuation has taken over a ~60-70% tumble. Lumia’s havent really ignited the sales registers at Nokia and Nokia really didnot invest in a plan B when going for Windows8.

So we watch this space. While an unconfirmed rumour currently, this bit has a high possibility of becoming real.

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