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Should Microsoft buy Nokia’s phone division?

Rumors are again circulating that Microsoft will buy Nokia’s mobile division. For how much? USD $19 Billion.

Russian editor-in-chief of, Mr. Eldar Murtazin, tweeted that “Steve Balmer, Andy Lees and Stephen Elop, Kai Ostamo will meet in Las Vegas to finalize agreement about Nokia smartphone unit.” Of course Nokia denied the rumor and Nokia UK issued the following statement “We’ve put these rumours to rest a long time ago. The focus for Nokia is on executing on our partnership around Windows Phone and growing the ecosystem, and each company has the tools they need to do so”.

Nokia Spokeman, Doug Dawson dispelled the rumor by email saying, “We put these rumors to rest a long time ago”.

Why would Microsoft buy Nokia? Maybe because two of its closest competitors Google and Apple have their own offering. Google with Motorola, Apple with its iPhone. Apple is successful with its iPhone but the same cannot be said with Google’s Moto as the deal has not been closed. So what assurance will Microsoft get that acquiring Nokia will make Microsoft a force to reckon with in the handset business?

Now on the other hand, why would Nokia sell? I really don’t know. A recent Gartner survey shows that Symbian retains the top spot as the world’s most popular mobile operating systems with 36.6%, followed by Android (25%) and then iOS (17%). In as far as handset sales is concern, Nokia is still on top with a 28.2%, Samsung second (17.2%), LG was third (6.6%), Apple fourth (3.2%) and RIM fifth (2.9%). Both Sony Ericsson and Motorola, 6th and 7th respectively. So with the numbers – should Nokia sell?

The strategic partnership formed earlier this year between Microsoft and Nokia to which Nokia will be dumping Symbian and MeeGo in favor of Windows Phone 7 as the primary smartphone platform for its handsets is paying off.

A recent Appcelerator and IDC study finds Microsoft is enjoying symbiotic success with Nokia. The study, which surveyed over 2100 mobile developers, looks at how companies are making the move from web to mobile, and how mobile is fundamentally transforming customer relationships.

Furthermore, the study reveals that out of 2100 mobile developers surveyed – 91% of developers are interested in the iPhone, while 83 percent are interested in Android handsets. Only 21 percent are interested in Blackberry and 38 percent of respondents saying they are ‘very interested’ in Windows 7, the highest ever for Microsoft.

When asked why developers are more interested in Windows Phone 7 now than a year ago, a plurality (48%) said it was the Microsoft/Nokia partnership. Nokia also received high marks from its new Lumia Windows Phone 7 smartphone announcement last month, with 28% of developers saying they are ‘very interested’ in developing for the device.

Now we are just talking about Windows Phone 7 here, Windows 8 will soon become available and if Windows 8 delivers as what Microsoft says it will, you can expect the numbers to even go up more.

My point here is this, if the Microsoft/Nokia partnership really become successful, I see no reason why Microsoft should buy Nokia and I don’t see why Nokia should sell. Now if the partnership fails, both companies should go back to the drawing board and see what went wrong and then fix it – buying and selling may not be the solution.

I maintain that Microsoft and Nokia are at their best with their core competence – Microsoft for software and Nokia as a handset manufacturer. But I am not Microsoft nor Nokia. They might be seeing something that we don’t. There must be some opportunity somewhere that we failed to analyze. So let’s wait and see.

I am logging off. Stay cool and God Bless us all!

(Article written by Jerry Liao)

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