It is starting to look like Nokia is about to be eaten by a larger player. Already software giant Microsoft considered buying Nokia, until it realised how much it would cost.
The Wall Street Journal claimed that Microsoft was in “advanced talks” to buy Nokia. According to the report, Microsoft would have used its substantial reserves of offshore cash for the deal. It’s estimated that Microsoft has about 89 percent of its cash parked abroad to avoid paying US taxes.
But it turned out this morning that Redmond could not get close to the price it wanted for Nokia, which is worth $14.3 billion and pulled out.
Ironically Microsoft was unhappy about Nokia’s weak market position and only wanted to buy the company if it was at a bargain basement price. Arguably Nokia is in a weak position because it packed in making Symbian phones to become a Microsoft only shop.
But if Microsoft does not buy Nokia there is a good chance that Huawei might. It is only a rumour but the Chinese company is said to be interested.
Huawei’s Richard Yu told the Financial Times this morning that it was considering these sorts of acquisitions but he did not confirm it.
One of the reasons that Huawei has not been rushing to Finland with its chequebook in its hand is because of the poor showing of Windows phones, and Nokia’s dependence on its deal with Microsoft.
Yu said that Huawei expected the industry to go through a period of consolidation. If he is correct than Nokia is almost certain to be for the chop.
