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Nokia denies $19B Microsoft purchase, but rumored deal viewed as boon for Apple

post #1 of 51
Thread Starter 
Nokia reacted quickly on Wednesday to a report claiming its phone business was acquired by Microsoft for $19 billion, calling it "baseless." But one Wall Street analyst had another word to describe a hypothetical deal between the two companies, at least for Apple investors: "heaven."

Speculation of a new deal between Microsoft and Nokia stems from a single Twitter post made by Eldar Murtazin, editor of Mobile-Review.com (via BGR). The post comes after Murtazin had previously reported in May that Microsoft and Nokia were set to enter into negotiations for a potential deal.

"One small software company decided last week that they could spend 19 [billion U.S. dollars] to buy part of a small phone vendor," the vague tweet reads. "That's it."

As the rumor spread, Nokia on Wednesday publicly commented on the issue, and called the claims "100 percent baseless," according to Reuters. The company's stock dropped as much as 10.2 percent on Wednesday as the rumor spread.

Murtazin was one of the first to suggest in late 2010 that Nokia could ditch its Symbian platform and partner with Microsoft to run the Windows Phone mobile operating system. That agreement was eventually announced in February in a deal struck with Nokia's new chief executive, Stephen Elop.

But Murtazin did have one high-profile miss recently, when he said in December that Apple would add a USB port to its second-generation iPad. The iPad 2 went on sale in March, but only features the standard 30-pin dock connector.



As the Microsoft-Nokia rumor gained steam on Wednesday, analyst Brian White was quick to pounce on the news. In a note to investors, he declared that Microsoft buying Nokia's mobile phone division would be "a deal made in heaven for Apple investors."

"(A Microsoft-Nokia deal) should provide Apple investors with even greater confidence that the company can continue to gain market share at the expense of legacy vendors in the mobile phone market," White said. "In our view, Apple investors could not ask for a better deal, and we believe a transaction would only further Apple's market share gains in the coming quarters."

Though Nokia denied the rumored deal with Microsoft on Wednesday, White sees the Finnish handset maker as perhaps the greatest source of market share gains for Apple. Nokia has struggled of late and lost share, but continues to be the worldwide leader in unit market share.

In April, IDC reported that Nokia shipped 108.5 million total mobile phones in the first quarter of 2011. That was good for a market share of 29.2 percent, well ahead of second-place device manufacturer Samsung at 18.8 percent. LG was in third with 6.6 percent, followed by Apple with 5 percent.

If Microsoft were to actually buy Nokia's struggling smartphone business to bolster its Windows Phone platform, White believes it would put Apple in a position to make even greater gains, filling the void left by Nokia.

"Microsoft's myopic approach outside the PC market is likely to provide more of a drag for Nokia mobile phone business and uncertainty for customers, allowing Apple's iPhone to gain even further market share in the coming quarters," he said.

Though the rumors of a Microsoft-Nokia deal were outright denied on Wednesday, the Redmond, Wash., software giant did confirm a different high-profile acquisition earlier this month: an $8.5 billion purchase of Skype. Microsoft plans to use that investment to support services like Xbox and Windows Phone.
post #2 of 51
It's really not clear how MS would gain anything other than risk in buying Nokia, having already convinced Nokia to use WP7. As things stand now, the worst case scenario is that WP7 totally flames out in the market and MS is relegated to the role of app maker for iOS and Android (which is actually not such a horrible thing and could still make MS a lot of money) and back-end server stuff (Exchange, sharepoint, etc). But if they buy Nokia, the worst case scenario in flaming out with WP7 also involves losing tens of billions of dollars.
post #3 of 51
I kind of want to sell my AAPL right now and go all in with NOK for the next week¡
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post #4 of 51
Unbelievable, the nonsense that can move markets in the short run..... things seem like they're on a hair trigger.... ugh....
post #5 of 51
The Wall Street Casino strikes again. The House wins. Put out the rumor, short Nokia, watch it drop 10%, and snicker all the way to the bank. Happens all the time to Apple. Even Cramer admits it. Should be illegal but the proof is in the pudding.
post #6 of 51
post #7 of 51
Quote:
Originally Posted by solipsism View Post

I kind of want to sell my APPL right now and go all in with NOK for the next week¡

What does an oil and gas company have to do with this discussion? APPL is the symbol for Appell Petroleum.

AAPL is the symbol for Apple Inc.
post #8 of 51
That $19B price will include all of Nokia's intellectual property -- patents.

The war between Apple & Nokia then becomes one between Apple & Microsoft.

Can't see any good coming out of such a deal for Apple. Apple should buy Nokia and all its patents then become a patent troll and recover some of the outlay through the licensing of those patents.
post #9 of 51
Quote:
Originally Posted by Blastdoor View Post

As things stand now, the worst case scenario is that WP7 totally flames out in the market and MS is relegated to the role of app maker for iOS and Android (which is actually not such a horrible thing and could still make MS a lot of money) and back-end server stuff (Exchange, sharepoint, etc).

It actually would change very little on the Android front considering MS already makes more money off of Android than WP7.
post #10 of 51
doomed
post #11 of 51
Danger! Danger, Will Robinson. Seriously, Microsoft f'd up Danger, Inc., and all they had to show for that was the KIN. I'd be disappointed if Microsoft didn't try to acquire Nokia. They'd end up with KIN3.

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post #12 of 51
Quote:
Originally Posted by Blastdoor View Post

It's really not clear how MS would gain anything other than risk in buying Nokia, having already convinced Nokia to use WP7. As things stand now, the worst case scenario is that WP7 totally flames out in the market and MS is relegated to the role of app maker for iOS and Android (which is actually not such a horrible thing and could still make MS a lot of money) and back-end server stuff (Exchange, sharepoint, etc). But if they buy Nokia, the worst case scenario in flaming out with WP7 also involves losing tens of billions of dollars.

I agree completely with you.

Why Microsoft would buy Nokia? They already successfully take over Nokia direction with placing an ex-microsoft VP as Nokia CEO (Elop) that already do everything Microsoft is commanding. Microsoft strategy for everything is to tie up company to depend on them.
post #13 of 51
Microsoft doesn't need to blow all that cash buying Nokia. They're already Microsoft's hardware bitch.

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post #14 of 51
Quote:
Originally Posted by sip View Post

The war between Apple & Nokia then becomes one between Apple & Microsoft.

That's why I think it's not real. For some reason most people still see Apple and MS as the only two companies worth going toe-to-toe.

Plus, with a current market cap of over $25B, revenue of $60B*, profits of $2.5B*, and total assests valued over $55B the rumoured price isn't even close to reality. Just look at what MS paid for Skype.

* 2010 figures


Quote:
Originally Posted by cvaldes1831 View Post

What does an oil and gas company have to do with this discussion? APPL is the symbol for Appell Petroleum.

AAPL is the symbol for Apple Inc.

Really?! An entire off topic post dedicated to a single-letter typo? Really?!
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post #15 of 51
Quote:
Originally Posted by solipsism View Post

I kind of want to sell my AAPL right now and go all in with NOK for the next week¡

Just for a potential 10% gain? Surely, you jest. Both Nokia and Microsoft are dead in the water. In the end it will be a two horse race... Apple and Google.

Proud AAPL stock owner.

 

GOA

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GOA

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post #16 of 51
I don't know I liked some of Nokia's phones. They are well made phones in general. I like the fact that its using Symbian OS to and think Nokia should be pushing that more aggressively than they are.
post #17 of 51
Quote:
Originally Posted by lkrupp View Post

The Wall Street Casino strikes again. The House wins. Put out the rumor, short Nokia, watch it drop 10%, and snicker all the way to the bank. Happens all the time to Apple. Even Cramer admits it. Should be illegal but the proof is in the pudding.

Why they put proof in pudding I'll never know.

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post #18 of 51
The only reason I could see MS buying Nokia is to bring handset manufacturing in house, but they've recently purged the executives (J Allard et al) that championed MS branded hardware.

OTOH until recently I would have said that 19 billion was crazy just to get a patent portfolio, but after the Skype deal who knows?

For Nokia's part it would be surprising for such a nationalistic, proud company to submit to acquisition by an American company, but then again I don't think most people expected them to adopt WP 7. And remember, they're now helmed by an ex-Microsoft guy, who brought in more ex-Microsoft guys to the corporate offices.

Some people joked that all that was a slow motion stealth acquisition, maybe not so far off the mark?
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post #19 of 51
Elop = trojan horse

Declare EOL for Symbian and make several downward earnings predictions tanking NOK stock, negotiate sale of mobile division to Microsoft at below market price, go back to work for Microsoft.
post #20 of 51
Quote:
Originally Posted by quinney View Post

Elop = trojan horse

Declare EOL for Symbian and make several downward earnings predictions tanking NOK stock, negotiate sale of mobile division to Microsoft at below market price, go back to work for Microsoft.

I was thinking the same thing!
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post #21 of 51
Quote:
Originally Posted by mstone View Post

Why they put proof in pudding I'll never know.

People want GUI access.
post #22 of 51
Quote:
Originally Posted by addabox View Post

...

For Nokia's part it would be surprising for such a nationalistic, proud company to submit to acquisition by an American company, but then again I don't think most people expected them to adopt WP 7. And remember, they're now helmed by an ex-Microsoft guy, who brought in more ex-Microsoft guys to the corporate offices.

Ballmer affectionately calls them walrus team 6.
post #23 of 51
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Originally Posted by markv View Post


That deal still bugs me.
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post #24 of 51
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Originally Posted by cvaldes1831 View Post

what does an oil and gas company have to do with this discussion? Appl is the symbol for appell petroleum.

Aapl is the symbol for apple inc.

enron
whats in a name ? 
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post #25 of 51
Quote:
Originally Posted by SpamSandwich View Post

Just for a potential 10% gain? Surely, you jest. Both Nokia and Microsoft are dead in the water. In the end it will be a two horse race... Apple and Google.

I used to think it would be a two horse race with Rimm being a distant third.
But those co C.E.O dorks seeme determined to prove me wrong.
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post #26 of 51
Quote:
Originally Posted by SockRolid View Post

Microsoft doesn't need to blow all that cash buying Nokia. They're already Microsoft's hardware bitch.

I agree. Also if they bought Nokia then HTC, Samsung, LG, Dell might not like it.

They have Nokia and the others pushing their Phone OS already.

Microsoft has a boat load of money in the bank, 50+ billion, and they have been sitting on it for a long time before the Skype deal. They should buy Twitter and Adobe with cash just to really heat things up.
post #27 of 51
Quote:
Originally Posted by bettieblue View Post

I agree. Also if they bought Nokia then HTC, Samsung, LG, Dell might not like it.

They have Nokia and the others pushing their Phone OS already.

Microsoft has a boat load of money in the bank, 50+ billion, and they have been sitting on it for a long time before the Skype deal. They should buy Twitter and Adobe with cash just to really heat things up.

Since buying one of these companies is basically the kiss of death, I would leave Twitter out of it.

But yes, by all means Microsoft, please buy Adobe and both bloated suites can go sailing off into the sunset on the sea of irrelevance, together.
post #28 of 51
Quote:
Originally Posted by SpamSandwich View Post

Just for a potential 10% gain? Surely, you jest. Both Nokia and Microsoft are dead in the water. In the end it will be a two horse race... Apple and Google.

Doubt it. There's lots of space to play in and lots of players. Computers, OS's, serving, iDevices, "the living room," (i.e., what's plugged into or in the TV), smart phones, tablets, retailing music, video, movies, books, photography, "the Cloud" (services, backup, apps, computing environment integration), the enterprise (which yes, Apple has plans for) etc. and etc. And I don't any one, let alone two, companies is going to own them all.

Don't overlook Amazon, for example, which seems to have "platform" aspirations of its own and has shown an ability to execute in multiple areas. And lots of one-click customer accounts (and which is a major Mac reseller). I'm also not totally writing off MS - there are healthy divisions and lots of smart people and legacy sales inertia and an enterprise operation - plus WP 7 (a la Mango) is not such a bad product at all. (But if the Win 8 "family - Windows 8, the two Win Tab 8 variants [full and iOS-like] and Win Phone 8 - isn't well-executed they will be caught in a long downdraft.)

facebook and Samsung are also sprouting tendrils in all directions like kudzu taking over a lawn. And keep your eyes on China in particular and Asia in general. They're producing scientists and engineers at prolific rates, have plenty of capital and their cultures are capable of amazing feats when focused. Plus longshots like HP and (now much) longer shots like RIM. And then there's always that something out of left field.....

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post #29 of 51
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Originally Posted by Blastdoor View Post

?...... flaming out with WP7 also involves losing tens of billions of dollars.

How so? Unless you think sunk costs matter?
post #30 of 51
Quote:
Originally Posted by lkrupp View Post

The Wall Street Casino strikes again. The House wins. (1)Put out the rumor, (2)short Nokia, watch it drop 10%, and snicker all the way to the bank. Happens all the time to Apple. Even Cramer admits it. Should be illegal but the proof is in the pudding.

What proof? Do you have some proof that any of the above 2 things actually happened?
post #31 of 51
Quote:
Originally Posted by solipsism View Post

?....... the rumoured price isn't even close to reality. Just look at what MS paid for Skype.

You're confusing two totally different types of assets.
post #32 of 51
Quote:
Originally Posted by anantksundaram View Post

How so? Unless you think sunk costs matter?

While sunk costs SHOULDNT matter to rational decision makers, corporate decision makers who want to keep their jobs are not always rational. Admitting a mistaken choice that will be costly is likely to hasten one's firing more than gritting it out for a few more years.
post #33 of 51
Quote:
Originally Posted by solipsism View Post

That's why I think it's not real. For some reason most people still see Apple and MS as the only two companies worth going toe-to-toe.

Plus, with a current market cap of over $25B, revenue of $60B*, profits of $2.5B*, and total assests valued over $55B the rumoured price isn't even close to reality. Just look at what MS paid for Skype.

* 2010 figures

The suggestion is not that MS will acquire the entire company Solip. Rather that they will buy "part of a small phone vendor". Nokia is a conglomerate that produces more than just smartphones.
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post #34 of 51
Quote:
Originally Posted by cameronj View Post

While sunk costs SHOULDNT matter to rational decision makers, corporate decision makers who want to keep their jobs are not always rational. Admitting a mistaken choice that will be costly is likely to hasten one's firing more than gritting it out for a few more years.

Point well taken.
post #35 of 51
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Originally Posted by markv View Post


or

timewarner+aol

worser
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post #36 of 51
Quote:
Originally Posted by anantksundaram View Post

Point well taken.

I wish I could get by ignoring sunk costs in my business. Yeah, I can ignore the fact that I've paid about $200,000 for a sound system and charge based on my direct costs, ignoring the money I've already spent on the equipment. However, at some point I'm going to have to sink *like* costs in the business again to replace said equipment. Best to make the money now, while I can, before I have to pony up those costs again.
post #37 of 51
Elop is fast becoming the most hated figure in Finland since Stalin.
post #38 of 51
Quote:
Originally Posted by ameldrum1 View Post

The suggestion is not that MS will acquire the entire company Solip. Rather that they will buy "part of a small phone vendor". Nokia is a conglomerate that produces more than just smartphones.

Point taken.
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post #39 of 51
Quote:
Originally Posted by bettieblue View Post

[...] Microsoft has a boat load of money in the bank, 50+ billion, and they have been sitting on it for a long time before the Skype deal. They should buy Twitter and Adobe with cash just to really heat things up.

That has been Microsoft's modus operandi. Buy a high-profile company either at its peak or just after it starts to decline. Then jam it into the Microsoft "product family," if you can call it that, like a frustrated toddler would try to jam a round peg into a square hole.

The reason for buying companies for so much money ($4 billion too much for Skype, for example) is because neither Gates nor Ballmer has any vision beyond the bridge of their glasses. They can't see potential in any startup because they don't understand anything except Windows + Office on legacy PCs.

So Microsoft can't cherry-pick small companies with enormous potential. When they're still cheap, low-profile, and malleable enough to be shaped into valuable, integrated components of the parent company's products. But no, instead, Microsoft pays the sucker price for mature tech companies who are tough negotiators, and who are too big and rigid to be molded into anything other than expensive bolt-on failures. Integration? Forget it.

WebTV. Danger. Tried and failed to overpay for Yahoo. Succeeded with Skype.

Why Skype? I'll bet you a dollar that Ballmer wants to put webcams into all PCs that come with Windows 8 pre-installed. (OK, maybe only the ones with Windows 8 Dual-Income No-Kids Family or Windows 8 Yuppie Bachelor editions or higher.) He'll claim that Windows 8's Skype will kill FaceTime. And the world will say "Yeah, whatever. Apple's had that for 3 years already."

8.5 billion down the drain.

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post #40 of 51
Quote:
Originally Posted by Prof. Peabody View Post

Since buying one of these companies is basically the kiss of death, I would leave Twitter out of it.

I would love nothing more than for MS to buy twitter
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