In Barely a week after Microsoft clinched the Skype deal at $8.5 billion, we are having rumours that the company is planning to buy Nokia. The chatter began when the industry insider Eldar Murtazin, wrote on his blog that negotiations had started between the two companies and Microsoft is expected to buy Nokias phone business for $19 billion. Nokia has denied that it was planning to sell its mobile business.
Mark Squires, Nokias UK director of communications said in his Twitter account, We typically don't comment on rumours. But we have to say that Eldars rumours are getting obviously less accurate with every passing moment. However, this statement sounds like a typical non-denial by a corporate house. Mark Squires has not said if the news is true or not, he has instead focussed on the nature of Eldars rumours.
The rumour does seem odd, as recently the two companies inked a deal worth billions that makes the Windows Mobile OS the main operating system for Nokias smart phones. But Eldar Murtazin has a stellar record of predicting the strategic moves of Nokia. When most tech analysts were of the opinion that Nokia would stick to its Symbian platform, Murtazin had forecast a Microsoft-Nokia deal. He also forecast the that Nokia would finish off its Ovi brand, for its online store something that the company at first denied before going ahead with it.
Currently the market capitalisation of Nokia is around $32 billion. Coincidently this is equal to cash stockpile that Microsoft has with it post the $8.5 Skype deal. If the deal does go through, it would mean a big shift in focus for Microsoft. Instead of being a purely software company, Microsoft could end up becoming a software plus hardware company like Apple.
As of now the company makes a very small amount of money less than $15- as licence fee from every device with Windows mobile. This is a very small amount for a large organisation like Microsoft. If the takeover deal with Nokia goes through, and somehow Microsoft is able to come up with a great hardware and software integration, then the profits per handset sold could become much higher.
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