Is Microsoft buying Nokia’s phone division for $19 billion?

By Tom Warren, on 1st Jun 11 3:12 pm with 46 Comments

Nokia and Microsoft historic partnership

Microsoft is rumored to be readying a deal to purchase Nokia’s mobile phone business.

The deal, valued at $19 billion, would have been unthinkable just six months ago but these days anything is possible. BGR reports that industry insider Eldar Murtazin, famous for revealing a number of Symbian devices and the original Windows Phone Nokia deal, has claimed Microsoft and Nokia talked numbers last week.

“One small software company decided last week that they could spent 19 bln USD to buy a part of small phone vendor,” wrote Murtazin in a tweet on Tuesday. “Thats it,” he added.

If Murtazin, and it’s a big if, is correct then it ties up Microsoft’s plans for Nokia and its recent Skype deal. The finish phone manufacturer revealed on Tuesday that its second quarter outlook isn’t great. The phone maker downgraded its own outlook and expects devices and services net sales to be “substantially below” its previous estimates. The revelations saw the company’s stock drop by 15% in morning trading on the NYSE.

Microsoft announced in May that it had acquired Skype for $8.5 billion. The acquisition price confused some analysts and investors, whilst others saw past the price and imagined the possibilities. Murtazin’s suggestions could see Microsoft adopt a strategy similar to that of Apple, where it controls the entire experience from device hardware through to software and services. The move would anger many OEMs and partners who are invested in Windows Phone but pave the way for an interesting future. For now, I’d take the rumors with a nice helping of salt.

Update: Nokia has claimed that the rumor is “completely baseless” according to Bloomberg’s Dina Bass.

  • http://openid.tomservo.eu/ Tom Servo

    You can bootstrap an entire hardware business and the whole big ass required marketing enchilada for way less. Sounds like Eldar’s going crazy.

  • http://openid.tomservo.eu/ Tom Servo

    You can bootstrap an entire hardware business and the whole big ass required marketing enchilada for way less. Sounds like Eldar’s going crazy.

    • http://www.facebook.com/sirtwist George A. Roberts IV

      Sure you could, but it would take a lot longer. Additionally, Nokia already has carrier relationships including carrier billing across the world that Microsoft doesn’t have.  They’re behind already … this would be a reasonable way to jump start things if they were planning on doing the “build your own hardware” thing for phones. I don’t know if I believe they would go that route, but IF they were going to do so this would make sense.

    • Joe05

      Very good point, I think this would be a smart move, Nokia has also talked about  getting into the tablet game, I could imagine a very well made and designed Microsoft/Nokia tablet and mobile phone line.

    • Joe05

      Very good point, I think this would be a smart move, Nokia has also talked about  getting into the tablet game, I could imagine a very well made and designed Microsoft/Nokia tablet and mobile phone line.

    • Joe05

      Very good point, I think this would be a smart move, Nokia has also talked about  getting into the tablet game, I could imagine a very well made and designed Microsoft/Nokia tablet and mobile phone line.

    • Joe05

      This whole rumor depends on what they exactly get, Nokia has several lifetimes of expertise in this, not to mention Nokia’s mobile payment systems and distribution Chanel and Name recognition, mapping and location software.

      I’ve always thought there was more to this whole Nokia deal than just a “closer” OEM partnership, if this is true, I could see Nokia manufacturing more than just phones in the future for Microsoft.

      I recall going into a Best Buy mobile store and looking at a Nokia net book that was available thru I think AT&t at the time, It was underpowered of course and had Windows XP as the OS, but the hardware was first rate, well built and assembled, It was made from Aluminum and had some heft to it and felt expensive, very Apple like if Apple did such a thing.

      I thought to my self, wow Nokia could actually build hardware as good as my Macbook pro, I think the future looks interestingl for Microsoft if this is true.

    • Joe05

      This whole rumor depends on what they exactly get, Nokia has several lifetimes of expertise in this, not to mention Nokia’s mobile payment systems and distribution Chanel and Name recognition, mapping and location software.

      I’ve always thought there was more to this whole Nokia deal than just a “closer” OEM partnership, if this is true, I could see Nokia manufacturing more than just phones in the future for Microsoft.

      I recall going into a Best Buy mobile store and looking at a Nokia net book that was available thru I think AT&t at the time, It was underpowered of course and had Windows XP as the OS, but the hardware was first rate, well built and assembled, It was made from Aluminum and had some heft to it and felt expensive, very Apple like if Apple did such a thing.

      I thought to my self, wow Nokia could actually build hardware as good as my Macbook pro, I think the future looks interestingl for Microsoft if this is true.

    • Joe05

      This whole rumor depends on what they exactly get, Nokia has several lifetimes of expertise in this, not to mention Nokia’s mobile payment systems and distribution Chanel and Name recognition, mapping and location software.

      I’ve always thought there was more to this whole Nokia deal than just a “closer” OEM partnership, if this is true, I could see Nokia manufacturing more than just phones in the future for Microsoft.

      I recall going into a Best Buy mobile store and looking at a Nokia net book that was available thru I think AT&t at the time, It was underpowered of course and had Windows XP as the OS, but the hardware was first rate, well built and assembled, It was made from Aluminum and had some heft to it and felt expensive, very Apple like if Apple did such a thing.

      I thought to my self, wow Nokia could actually build hardware as good as my Macbook pro, I think the future looks interestingl for Microsoft if this is true.

  • ss

    This should be pretty sweet for app developers.

  • ss

    This should be pretty sweet for app developers.

  • Anonymous

    This is awsome now we gonna have zune hd as wp7

  • Anonymous

    This is awsome now we gonna have zune hd as wp7

  • Anonymous

    This is awsome now we gonna have zune hd as wp7

  • http://twitter.com/efjay01 Ef Jay

    Waving goodbye to htc and their non-sense, crappy cameras, android clone devices…….

    • http://www.facebook.com/wshutt Wayne Shutt

      i love my HTC HD7, I traded my iphone4 for it, best phone ive ever had and trust me ive had a lot

    • http://www.facebook.com/wshutt Wayne Shutt

      i love my HTC HD7, I traded my iphone4 for it, best phone ive ever had and trust me ive had a lot

  • http://www.facebook.com/people/Ahmad-AbdulLateef/100000511909755 Ahmad AbdulLateef

    This isnt confirmed people I’m not sure Microsoft would be doing this at the moment though

  • Kevin

    Buying their “phone business”?  What other business are they in?

    • http://www.facebook.com/profile.php?id=100000653771484 Eric Jones

      Chips, cell tower equipment and other backhaul equipment to cell network providers.

    • http://www.facebook.com/profile.php?id=100000653771484 Eric Jones

      Chips, cell tower equipment and other backhaul equipment to cell network providers.

    • Anonymous

      I was wondering exactly the same :p

    • FMH

      They solely own NAVTEQ. A mapping solution the powers Garmin, Magellan, Lowrance, NDrive,Yahoo! Maps, Bing Maps, ,MapQuest, Flight Simulator X and Ovi Maps.
      And their direct competitor is Google Maps.
      And I think if they ever bought anything from Nokia, it would be NAVTEQ.

    • Anonymous

      Since When is Microsoft a Small Company? I call this bull on that statement alone!

    • Alombelino

      It’s called sarcasm.

    • Anonymous

      Nokia’s structure is made up of 3 devisions:

      -Smart Devices (smartphones, internet tablets, mini laptop etc…)
      -Phones (dump phones)
      -Markets (supply chains, sales channels, etc… )

      and 2 (significant) subsidiaries:

      -NAVTEQ (maps and location services)
      -Nokia Siemens Networks (network infrastructure, joint venture with Siemens)
      (there are many other subsidiaries but not as significant)

      So if we are talking about Microsoft buying Nokia’s phone business we are talking about either buying Nokia minus the subsidiaries, or maybe only buying the Smart Devices devision.

      Only buying the Smart Devices devision doesnt make much sense, they will have access to hardware manufacturing but not Nokia’s vast supply chains, sales channels, carrier deals etc…

      If MSFT goes for it, it should go all in and buy everything including the subsidiaries.

  • Anonymous

    It’s BS. Calling that right now.

  • http://twitter.com/abhi1manyu Abhimanyu Jamwal

    not possible but at 19 billion it is way cheaper considering it gives them instant access to the best hardware in industry and the widest network in devolping mobile markets like india and china where even today nokia sells like hot cakes

    • https://profiles.google.com/christopher.gull/ CG

      If so, they better not change the Nokia brand.. It’d be like Philips (shavers) in America, still being labelled “Norelco”. But I still hope Microsoft isn’t really going to buy Nokia.

    • https://profiles.google.com/christopher.gull/ CG

      If so, they better not change the Nokia brand.. It’d be like Philips (shavers) in America, still being labelled “Norelco”. But I still hope Microsoft isn’t really going to buy Nokia.

    • https://profiles.google.com/christopher.gull/ CG

      If so, they better not change the Nokia brand.. It’d be like Philips (shavers) in America, still being labelled “Norelco”. But I still hope Microsoft isn’t really going to buy Nokia.

  • Anonymous

    This would be huge news.. if not for one thing but to trigger other people to react..  in one way, it would be exciting for WP7, but on other ways, it could potentially be dire news for fair competition with the absurd patent portfolio MS would have on hand..   19 billion is a LOT of money to lay on the table though

  • Anonymous

    This would be huge news.. if not for one thing but to trigger other people to react..  in one way, it would be exciting for WP7, but on other ways, it could potentially be dire news for fair competition with the absurd patent portfolio MS would have on hand..   19 billion is a LOT of money to lay on the table though

  • Anonymous

    This would be huge news.. if not for one thing but to trigger other people to react..  in one way, it would be exciting for WP7, but on other ways, it could potentially be dire news for fair competition with the absurd patent portfolio MS would have on hand..   19 billion is a LOT of money to lay on the table though

    • Tom

      $19 billion for Nokia would be a bargain compared to $8.5 billion for Skype.

      However, Nokia has a market capitalization of $25 billion — and that’s *AFTER* the recent drop.  Once you add in the acquisition premium, Microsoft would have to spend at least $35 billion for Nokia.  (There aren’t enough large shareholders to buy a controlling interest on the sly.  Microsoft would have to make an offer to buy out all the shares.)

      Murtazin is crazy.

  • Mark

    Doubt it. Unless Ballmer is planning on going out in a blaze of stupidity.

  • May Man

    Its hard to say if this will happen considering the fact that they just partnered with them. I don’t think buying would be an option on the table at the current moment. If anything once Windows Phone 7 starts to pick up this could be an option.

    It would work counter productive for them to purchase something that is falling at this point.

  • May Man

    Its hard to say if this will happen considering the fact that they just partnered with them. I don’t think buying would be an option on the table at the current moment. If anything once Windows Phone 7 starts to pick up this could be an option.

    It would work counter productive for them to purchase something that is falling at this point.

  • Guest

    If
    you consider the extent to which current WP7 manufacturers like HTC, Samsung
    & LG are heavily committed to Android then it is highly unlikely that any will
    ever completely commit to WP7 in the way that Nokia have.  I think Microsoft will have been stung by the
    Samsung firmware issue and should be seriously considering managing the entire manufacturing
    process in the same way that they do with the XBOX.  In the event that Microsoft buys Nokia then I
    think that brand would disappear (eventually) and there would simply be the
    Windows Phone in the market competing against the iPhone and then the myriad of
    Android based custom devices.  I really
    don’t think the same parallels exist between the PC/Mac market with smartphones.  Windows almost complete dominance of the PC
    operating system (don’t get me wrong, I do like Mac OS) affords the opportunity
    for PC manufacturers to innovate and differentiate their products.  I think the smartphone is much more akin (no
    pun intended) to that of the gaming console and here Microsoft don’t let anyone
    else build XBOX devices.  Given the
    strategic importance of smartphones I don’t see $19bn to secure a solid
    manufacturing process as being too daft. 
    It would massively simply the decision making process for consumers
    choosing between Windows Phone, iPhone and the others.  That at the end of the day, is what it is all
    about.

  • Anonymous

    so now  we can get all kind of prices on phones with the best os

  • https://profiles.google.com/christopher.gull/ CG

    “The finish phone manufacturer revealed on Tuesday that its second quarter outlook isn’t great.”

    Is that meant to be a mockery? It’s spelled Finnish with a capital F and double N.

  • https://profiles.google.com/christopher.gull/ CG

    “The finish phone manufacturer revealed on Tuesday that its second quarter outlook isn’t great.”

    Is that meant to be a mockery? It’s spelled Finnish with a capital F and double N.

  • http://twitter.com/efjay01 Ef Jay

    Have a read of these two reviews and tell me Microsoft doesnt need a hardware manufacturer that will do justice to WP7:

    http://www.phonearena.com/reviews/HTC-Trophy-Review_id2751/page/3
    http://www.phonearena.com/reviews/HTC-HD7S-Review_id2752/page/3

    Compared to an anodroid device review:
    http://www.phonearena.com/reviews/HTC-Sensation-Review_id2753/page/4

    The materials, build and camera all subpar on the WP7 devices. MS needs to ditch these sly OEM’s and take a chance on its mobile OS, ‘cos no one of its “partners” seems willing.

    • zzz

      Don’t know about HTC but Samsung Focus is very well made, probably better than all Android Galaxy S variants.

    • Anonymous

      The LG Optimus 7 should have made an appearence in the US.  LG did a solid job with that phone.  It’s the best of the current generation by far, and I’ve used them all.

  • BI1000

    Talk about time to strike if they do- Nokia share price has dropped significantly latley. Well see what they do. However I dont see it happening.