Rumors today from the Finnish press suggest that Samsung Electronics Co. is set to acquire the Finnish handset maker Nokia Corporation (NYSE:NOK). This is not the first time a Samsung has been rumored to be looking to buy Nokia and Samsung is not the only company that has been linked to Nokia in recent weeks.
As rumors keep flying around a possible Facebook Inc (NASDAQ:FB) handset detractors say that the firm would need to acquire a huge swathe of patents in order to make it work. Nokia has those patents and is currently going for a reasonably low price because of recent poor performance and large debt.
Those facts linked the two together in a possible purchase deal that would make sense for Facebook, assuming a Facebook phone makes sense. That deal has failed to materialize and is just one of many mobile related acquisition rumors that have formed in the wake of the Facebook IPO.
What does not make sense, it seems, is for Samsung to acquire Nokia. Unless the handset maker is planning on breaking with Google Inc. (NASDAQ:GOOG) any time soon there is no credible reason to go looking to Nokia unless there are some overlooked patents Samsung is missing.
If Samsung is missing patents this is hardly the time to go looking for them. The firm is, and has been for some time, in a war with Apple Inc. (NASDAQ:AAPL) across the world regarding the design of its smart phones and its tablets. An acquisition of patents now would surely not shore up too many weaknesses in their case.
Nokia is performing badly. It is completely reliant on the performance of the Windows Mobile platform to take it out of the doldrums and refuses to get rid of its sluggish, low margin and underperforming feature phone business. Many have recommended the company restructure and sell off the part of the firm that sells lower quality handsets.
Samsung would be wading into a world of problems if they got involved in Nokia. There doesn’t seem to be any real benefit from the proceedings. Samsung is the number one handset maker in the world now after eclipsing Apple. They are tied to Google and the conflict with Microsoft might be too much.
On top of all of that a merger between the two would take a long time to get past regulators and may be denied because of the amount of market it would secure for Samsung. This rumor is a fun thought experiment, if even that.
