Earlier today BGR reported that Microsoft is buying Nokia’s phone business for around $19 billion. While I usually don’t get into speculations, I picked up the phone and spoke to some people who are very reliable and have learnt that this deal should go through by end of June or early July sans the Federal lookups.
While Nokia and Microsoft’s Windows Phone have never been a big thing is the USA ever, this deal means a lot for both companies who are struggling to keep with competition from Apple’s iPhone and Google’s Android.
Nevertheless, it should be a FAIL deal as this kind of announcement will eventually effect the prices of this companies on stock exchanges and it sounds like a very desperate deal by Microsoft to get into a failing business they have not been able to get a hold of since they launched Windows Phone 7 and also tied up with Nokia to get their software on them.
Let me remind you that Nokia and Microsoft are both notorious at delaying software for the devices and no matter what hardware they get this is going to be an uphill battle for both these companies.
Also I have confirmed with more than one of my sources that this deal is a go through. This should be announced in late June or early July. I am hinting for early July because my contact was very adamant about it and I am too because of the fact that June is a quarter end and they would not want to risk it by having dipping stock prices, would they?
As per my contact Microsoft will possibly buy Nokia and their entire operations for around $12 billion. I find that a fair price and find $19 billion too high on the price for Microsoft. Up to you.
Why Would Microsoft Buy Nokia?
For the past few years, Microsoft has been the be-behind player in the mobile segment. They were so desperate to get things going that they tied up with Nokia to get their software on their devices.
Now, Windows Phone 7 is not a software which can only run on a single platform and Samsung, HTC and LG all have devices running Windows Phone 7. Only Nokia did not have it.
Why not? Because Nokia was still running on the age-old-never-smartphone-friendly Symbian OS and Microsoft had an upcoming OS which was maybe good but not up to par. Both these companies got into a commitment that Nokia would produce devices with Windows Phone 7 and get along really well.
So Why Buy Nokia?
Nokia is a practical dying business. Few years ago I had a love for Nokia thanks to the Nokia N95 (which was the first smartphone device ever), but their touchphone devices have disappointed me over and over again. Not because of their hardware, but because of their software.
In the meantime, Apple managed to steam roll them and Android managed to literally get them into a submission position. With Microsoft they have a new hope which I am certainly not hopeful about. I hope that you are optimistic but this is a FAIL deal.
Microsoft Pissing Off Other Manufacturers? Becoming Apple?
Of recent, Microsoft seems to be on a path which looks to be emulating Apple. There have been rumors that they only want a single manufacturer for their tablets, and it would be no surprise if they are looking to go the Apple way by having their software on a single platform, that is Nokia.
Understandably, this might have been a good decision. However, it would be one when you have some market leverage. Right now, both Nokia and Windows Phone 7 are in doldrums in United States and in Europe.
I really can’t imagine how both these companies agreed to this, but this is how it goes. Eventually you will stop seeing WP7 devices on HTC, Samsung, LG and more.
Good luck Microsoft and Nokiaâ€¦