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Microsoft Nokia buyout: why it makes sense

Microsoft Nokia buyout: why it makes sense

The rumoured buyout of Nokia by Microsoft was dismissed as “baseless” by Stephen Elop back in June. But with the Google Motorola acquisition nigh-on done and dusted, a deal to place the Finnish phone maker in Redmond’s hands is suddenly starting to look more likely.

The man who mooted the tie-up earlier this summer, Eldar Murtazin, has been at it again tweeting that the Big M was closing in on a colossal $27 billion deal for Espoo. And there’s simply no escaping the fact that this is a takeover that makes sense for both parties.

Nokia logo large

For Microsoft, buying Nokia is a no-brainer. Yes, it’ll be expensive. But if it really wants to compete properly in the smartphone space, it’s going to need a gesture this big. In terms of volume, Windows Phone just hasn’t cut it in the year since launch.

Granted, this might compromise other partners. But it would mean Microsoft could fully focus on delivering an all-round software and hardware solution like Apple’s iPhone.

It would make rolling out software updates easier, stopping customer confusion and reigning in any danger of bloatware hitting Windows Phones too.

There’s a growing sense that a Nokia Windows Phone will not be enough to push to Microsoft’s OS further, or save Espoo from inexorable decline. While a deal would be hard to swallow for Nokia’s Finnish shareholders, so was appointing an American as CEO or deciding to ditch MeeGo and push Symbian aside in favour of Windows Phone.

This deal is the logical next step for Nokia. It’s been on the back foot ever since Steve Jobs showed off the first iPhone and has failed to respond to the growing challenge of Android.

By getting the full financial backing of Microsoft, Nokia could keep its brand identity and break the hallowed ground of America quickly. Without it, promoting a Nokia Windows Phone on US shores and around the world won’t be as easy. This could energise a company in desperate need of a boost.

mango official

Then, of course, there’s the looming issue of patents. Google’s deal for Motorola comes with a huge 17,000 patents.

Nokia has in excess of 20,000 patents and Microsoft is hungry for more as it looks to up the ante in its battle with Google.

Using Nokia as a (pricey) pawn might seem churlish, but Microsoft isn’t short of cash and patents would not be the sole reason for a buyout. But it’s certainly the biggest draw.

Eldar Murtazin was nailed on when he said Nokia and Microsoft will tie up a deal for Windows Phone and his track record is nigh on impeccable when it comes to Espoo’s affairs. It’s only a matter of time until this takeover takes place.

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