Microsoft came close to buying Nokia

June 20, 2013
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nokia-microsoft-wp7It basically seems that Nokia is up for sale. Earlier this week a top-level exec from Huawei said that the company was philosophically open to buying Nokia, however it never entered into any discussions. The same can also be said of Microsoft except that it actually has been in deep talks with Nokia about buying its handset business.

The deal making, which occurred as recently as this month, seems to have collapsed over the price and worries about Nokia’s decreasing market share. According to those familiar with the possible acquisition say that the talks have now stopped and are unlikely to be revived.

Since 2011 Nokia has been using Microsoft’s Windows Phone as its only smartphone platform, a move which has so far failed to change Nokia’s fortunes. Although other companies like Samsung and HTC make Windows Phone based devices, they also make Android based phones. Nokia doesn’t make any Android phones and as a result is dependent wholly on the fortunes of Microsoft and Windows phone.

According to research company IDC, around three percent of smartphones shipped in the first three months of this year use Windows Phone. This is a very small market share when compared to Android, which IDC says was used on 75 percent of smartphones shipped in the same period. The only seemingly good news for Nokia is that Windows Phone is now more popular than Blackberry (but that is hardly a reason to celebrate) and that 79 percent of all Windows Phone devices are now made by the Finnish company.

Because of the 2011 deal, which effectively locked Nokia into only using Windows Phone, it isn’t clear why Microsoft would want to buy Nokia unless Microsoft thinks that other parts of the handset maker’s business, like the Navteq mapping division, could add value.

What do you think, who should buy Nokia?

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