Nokia Corporation (ADR) (NOK) Almost Sold Handset Unit To Microsoft

Nokia Corporation (ADR) (NOK) Almost Sold Handset Unit To Microsoft
Hermann / Pixabay

There’s another new development in the speculation that Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) might be acquired by another company. Earlier this week Chinese smartphone maker Huawei Technology Co Ltd (SHE:002502) said it would be interested in acquiring the company, but then stressed that it wasn’t in talks to do so. As it turns out, that may have been because Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) has been talking to Microsoft Corporation (NASDAQ:MSFT)  instead.

Nokia Corporation (ADR) (NOK) Almost Sold Handset Unit To Microsoft

The Possibility Of Nokia Being Bought by Microsoft

The Wall Street Journal’s Sharon Terlep, Dennis K. Berman and Shira Ovide report that Microsoft was very close to buying Nokia’s hardware division this month, but then the talks broke down. According to their sources, the talks stalled because of disagreements over the price and also concerns about Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s falling market share. Source also told The WSJ that there were other issues as well.

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At this point it isn’t know how much Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) asked for its hardware division or how much Microsoft Corporation (NASDAQ:MSFT) was offering. The Finnish company’s U.S. stock market value is over $14 billion. Last year almost half of the company’s revenue, which amounted to around $40.15 billion, came from its handset business.

Nokia’s Partnership With Microsoft

Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) and Microsoft have been partners for some time on the Windows Phone. Nokia united with the software giant to take on Google Inc (NASDAQ:GOOG)’s Android operating system and Apple Inc. (NASDAQ:AAPL)’s iOS. The two companies’ fates have been intertwined in the fight for global smartphone market share. Unfortunately though, taking a bite out of Android and iOS is taking some time.

It might make sense for Microsoft Corporation to buy Nokia’s handset business though. The company’s Surface tablet is the first piece of hardware it has built on its own without partners, so a smartphone might be the next logical step, although the Surface is still struggling to gain market share against the iPad and inexpensive Android tablets. Of course as with anything in the tech world, it takes time to pull market share away from competitors that have been as dominant as Android and iOS have been for so long.

Nonetheless, there has been speculation that Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) might be better off selling only its handset business and focusing entirely on the profitable Nokia Siemens Network. If it could acquire the other half of NSN, business may be more stable on a shorter time frame for the company.

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