Huawei chairman hints at Nokia acquisition, ditching Windows Phone [Update]

Nokia has faced many difficulties in recent years, thanks in no small part to its failure to quickly respond to the rise of smart devices in the mobile space. Its Windows Phone strategy has so far struggled to gain traction; the company is by far the largest Windows Phone vendor, but it remains the biggest fish in a very small pond, with Microsoft's mobile OS holding on to just 3.2% of the global smartphone market

But Nokia has been putting up a strong fight with increasingly capable devices like the Lumia 925, which we recently reviewed, and exciting new handsets on the way such as the 'EOS', with its 41MP camera. Nonetheless, a cloud of uncertainty continues to hang over the company and speculation over its future resumed today, amid comments made by a senior executive at Huawei. 


Nokia's product portfolio has been getting stronger, with handsets like the Lumia 920 and Lumia 925 -
but that hasn't stopped continued speculation over the company's future

Speaking with the Financial Times at the launch of the company's ultra-slim Ascend P6, Richard Yu, chairman of Huawei's consumer business group, discussed the possibility of acquiring Nokia to help boost its presence in markets such as North America and, in particular, Europe. "We are considering these sorts of acquisitions," he said. "Maybe the combination has some synergies but depends on the willingness of Nokia. We are open minded."

According to ZDNet, further comments by Yu alluded to the possibility of ditching Windows Phone altogether, in favour of an exclusive focus on Android handsets, if Nokia was "willing to enter negotiations". Unsurprisingly, Nokia isn't discussing these reports, saying that it "does not comment on market speculation".

Nokia's share price is up thanks to that market speculation; at one point, it had risen by around 11% to $4.10, but at time of writing, its shares are just under 7% above their value at the start of today's trading. 

Source: Financial Times / ZDNet

Update: Huawei's vice-president for external affairs, Bill Plummer, has told Reuters that the company "has no plans to acquire Nokia" - but stopped short of explaining why Richard Yu was under the impression that the company was considering that possibility, or why Yu apparently chose to share that information with the Financial Times. 

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Huawei is out to lunch with even suggesting this, they are more likely saying crap like this as more of a dig at MS and the licencing costs and trying to get MS to lower the pricing for them. We all know how Chinese companies work I think.

korupt_one said,
Huawei is out to lunch with even suggesting this, they are more likely saying crap like this as more of a dig at MS and the licencing costs and trying to get MS to lower the pricing for them. We all know how Chinese companies work I think.

True - screwing around with the market hoping to get concessions. With that being said it is kind of funny what the execute said given that Huawei sells its own range of Windows Phone devices such as the Ascend W1.

WP is the new classic Apple Computer, while the Android is the new classic IBM PC compatible.
any with better hindsight will figured why.

Such a good point! I often view it like this too. MS forgets what made them big. Create an OS that much like the x86 Windows system is capable of being installed on arm based devices of all sorts of different configs. People could update their OS to new major revisions for a small price until they personally think their phone is just not cutting the slack anymore. Phones could be sold without OS, so companies could focus on hardware and not customizing android and passing on patches. MS would quickly storm back. Although WP needs some serious work to get it up to par.

What a great combination. Nokia, one of the world's most innovative, high quality, consumer friendly companies joining forces with Huawei, the world's greatest purveyor of cheap rubbish and stolen IP joining forces to sell yet another tacky Android phone. Wow. Can't wait.

The reason for this sabre rattling is likely because Microsoft's lawyers have knocked on Huawei's doors. We already know that Huawei's domestic rival ZTE pay Microsoft up to $35 per handset/tablet for Android. Huawei so far have skated. Looks like that's coming to an end. So far in the cases that have gone to court involving Android, Google has lost every case in every country. Huawei is just squealing like a stuck pig.

Edited by Major Plonquer, Jun 18 2013, 11:51pm :

People should learn to read.. What was written was that he was 'open' to a takeover, as in would be willing to consider/talk/think (about) it. Never did he mention anywhere there was any talk of an actual takeover.. Seriously people, learn to read..

Besides, MSFT will _never_ allow this to happen. IF Nokia leaves WP behind at this point the platform is dead.

A lot of people fail to remember the mobile phone business is actually a small part of nokias operations... Huawei would want Nokia for its patents and mobile infrastructure businesses, this is the competitive area between the two companies.

After years of stealing other peoples' IP, why would Huawei change horses now? Huawei just out and out ripped off Cisco's IP. Now they want to get their grubby little fingers on Nokia Siemens? Yes they likely do. But pay money? It's not in their character.

Nokia doesn't need to sell itself, nor does it want to. All indications are that the business is back on track and will be in the black again. Lumia sales are growing, 5.6 Million in Q1 and if that number comes in even higher for Q2 I see zero reason to change strategy regardless of what some "experts" may say.

BTW, with the strong showing of the Lumia 520 and Verizon finally getting a high end Lumia 928 to push I expect ~7 million or so for the quarter sales wise.

Imagine how much more they would have made had they not been so exclusive to just ATT... im glad theyre now getting flagship devices to the Big 4 carriers, but they needed to do so sooner

SteveyAyo said,
Imagine how much more they would have made had they not been so exclusive to just ATT... im glad theyre now getting flagship devices to the Big 4 carriers, but they needed to do so sooner

I agree that the exclusivity isn't the best idea but for them there has to be some more going on, like AT&T agreeing to provide specific ad and marketing conditions etc. Who knows?

Unfortunately, each of America's "Big 4" carriers is miniscule on the world stage. Even combined they wouldn't even be in the top 10. They're not meaningful.

I don't why 'till now OEMs are still living under illusion that Android is free. Do they know that they still have to pay MS fee for every Android handset? ... lolz ...

People have been asking for Nokia crafted phones with Android onboard for ages.
There is no point denying the superior craftmanship of Nokia devices, those gadgets are excellent. Nokia knows how to build qualityhardware.
Unfortunately, sofware has never been in line with hardware and the decision to jump exclusively on WP train was a major dissapointnment to lots of users.

Let there be Nokia phones with Android/MeeGo/Tizen

PanzerFury said,
People have been asking for Nokia crafted phones with Android onboard for ages.
There is no point denying the superior craftmanship of Nokia devices, those gadgets are excellent. Nokia knows how to build qualityhardware.
Unfortunately, sofware has never been in line with hardware and the decision to jump exclusively on WP train was a major dissapointnment to lots of users.

Let there be Nokia phones with Android/MeeGo/Tizen

That's funny, I mean lets look at some things, LG, a big Android only vender gets heralded for managing to sell 10 million devices in a quarter, huge success for LG, everything's gravy. In the same quarter Nokia sells 5.6million Lumia devices, not counting the other 9 or so million lower end Asha phones, and it's all doom and gloom and they need to switch to Android asap.

It's laughable really, Nokia is growing it's Lumia line and selling more with each quarter and they should just stop now?

I am afraid you got a slightly wrong impression of my post.
I am not saying that Nokia should stop producing WP phones, make 180° turn and bend the knee to Android software.
I am saying that I would also LOVE to see Nokia quality phones with operating system other than WP *exclusively*. Other manufacturers (including the ones you mentioned) are not afraid of experimenting with other ecosystems, that means making phones with WP and Andriod/MeeGo/etc. The important part is, that Nokia produces ONLY phones with WP onboard.

I hope Microsoft buy Nokia, rather than Nokia stop making WP devices, they are the best WP phones I have used. I dislike this Huawei now.

Walrush said,
lol Oh Huawei....good luck getting over that Bridge with the Microsoft Juggernaut standing in your way.

Really? Are you aware that if China decides,to pull the plug the mighty US are bankrupt the day after?

Fritzly said,

Really? Are you aware that if China decides,to pull the plug the mighty US are bankrupt the day after?

And the US being Chinas #1 export market and the one running lots of those Chinese based factories would leave China with no problems of it's own?

You guys need to take a step back and at least try to understand global economics before you toss out these sort of comments. China has it's own huge problems and any reserves it does have it's keeping on hold to fight off these growing problems. It's sitting on a massive, and I mean massive, housing bubble of it's own that no one seems to want to talk about. But if you want to believe the cooked government economic PR books that everything is fine and dandy then go ahead. 5-10 years from now when that bubble finally busts and makes the US's housing crisis seem like a walk in the park I'll like to see you talk it up then.

GP007 said,

And the US being Chinas #1 export market and the one running lots of those Chinese based factories would leave China with no problems of it's own?

You guys need to take a step back and at least try to understand global economics before you toss out these sort of comments. China has it's own huge problems and any reserves it does have it's keeping on hold to fight off these growing problems. It's sitting on a massive, and I mean massive, housing bubble of it's own that no one seems to want to talk about. But if you want to believe the cooked government economic PR books that everything is fine and dandy then go ahead. 5-10 years from now when that bubble finally busts and makes the US's housing crisis seem like a walk in the park I'll like to see you talk it up then.

What make you think that you are more qualified than others to talk about global economics?
And no I do not trust the "cooked government economic PR books" any more than the as well cooked books of banks and institutions here but facts are facts:
The percentage of US debt in the hands of Foreign governments is about 46 percent of all U.S. debt held by the public; between $4.5 trillion and $4.7 trillion. China, which owns more about $1.2 trillion in bills, notes and bonds, according to the Treasury, is the largest foreign holder of U.S. debt. How many house bubbles such amount of money could cover?
See you in ten years........ And in the meantime take a trip through the Africa continent and check what is going on there.....

Fritzly said,

What make you think that you are more qualified than others to talk about global economics?
And no I do not trust the "cooked government economic PR books" any more than the as well cooked books of banks and institutions here but facts are facts:
The percentage of US debt in the hands of Foreign governments is about 46 percent of all U.S. debt held by the public; between $4.5 trillion and $4.7 trillion. China, which owns more about $1.2 trillion in bills, notes and bonds, according to the Treasury, is the largest foreign holder of U.S. debt. How many house bubbles such amount of money could cover?
See you in ten years........ And in the meantime take a trip through the Africa continent and check what is going on there.....

$1.2 trillion is what they've basically burned through just for the bank sector through TARP. Honestly, you want to make it that much of a big deal and a big deal breaker the Chinese can hold up anytime they want to get their way. Please, do go on and tell me how them asking for that money will "bankrupt" the US overnight when you yourself just spat out that they only have a small chunk of the overall debt, 1.2trillion compared to what the Fed actually holds, which is the majority of the US debt out there. The US wouldn't go flat out broke, it'd probably fall into a recession due to inflation spiking and the dollar weakening as they printed out that $1.2 trillion to pay out. The only one that can truly bankrupt the US to the degree you make it sound is the Federal Reserve itself, as the largest holder of US debt by far.

GP007 said,

$1.2 trillion is what they've basically burned through just for the bank sector through TARP. Honestly, you want to make it that much of a big deal and a big deal breaker the Chinese can hold up anytime they want to get their way. Please, do go on and tell me how them asking for that money will "bankrupt" the US overnight when you yourself just spat out that they only have a small chunk of the overall debt, 1.2trillion compared to what the Fed actually holds, which is the majority of the US debt out there. The US wouldn't go flat out broke, it'd probably fall into a recession due to inflation spiking and the dollar weakening as they printed out that $1.2 trillion to pay out. The only one that can truly bankrupt the US to the degree you make it sound is the Federal Reserve itself, as the largest holder of US debt by far.

Talking about global economics knowledge.....
The Federal Reserve holds around 10.8 of US Debt only; Social Security, through its Trust Fund, holds more: around 16%; The US civil and military retirement funds around 8% and another 30% is in the hands of banks, insurance companies, private individuals etc.
Controlling 11% of the outstanding debt does not make the FED "the only one that can truly bankrupt the US".
And I am not venturing to add the effect on the bond market of credit ratings, if a major player pulls out etc., etc.

Fritzly said,

Really? Are you aware that if China decides,to pull the plug the mighty US are bankrupt the day after?

Yep, if you looking for cheap and crap then China is your place. I would we willing to pay more if the product was actually made in North America or Europe.

If both do the same thing, China would die before US. Most Chinese incomes are from exporting to US.

Fritzly said,

Really? Are you aware that if China decides,to pull the plug the mighty US are bankrupt the day after?

The world doesn't need another manufacturer of phones that all look the same, the market is saturated with Android phones of all flavours already.

Barring the fact Huawei make Android phones already, so that wouldn't necessarily mean there's another brand entering the market - depending on how they went forward as a whole company.

IF the buyout did happen.

Two things will happen if Huawei acquires Nokia : 1) Windows Phone will be dead 2) Nokia will get squashed because they can't compete with a juggernaut like Samsung.

StandingInAlley said,
Two things will happen if Huawei acquires Nokia : 1) Windows Phone will be dead 2) Nokia will get squashed because they can't compete with a juggernaut like Samsung.

I agree with point one but not point two:
People buy Nokia because they are familiar and reassured with its hardware quality not the OS.

People buying Samsung/Android devices however don't care... if they did HTC would be where Samsung is right now. People with Android want a cheap device with flashy cool features they can not use.

Definitely the first will happen as Nokia is all thats keeping Windows Phone afloat at this point. And tbh it will be the best thing for Nokia's survival as a company, Microsoft is more concerned about getting its services on other platforms before WP so they obviously wont miss it.

I'm not sure why people seem so convinced Microsoft will come to Nokia's rescue when they dont seem to care about their mobile OS. Microsoft needs to be kicked out of the consumer space because they are too incompetent and slow to compete and need to make way for someone else.

Top notch trolling with your second paragraph... you should start a company that supplies updates to as many OEMs as Microsoft does and show them how its done... Apple and Google don't supply updates to as many people as Microsoft so theyre able to move quicker

SteveyAyo said,
Top notch trolling with your second paragraph... you should start a company that supplies updates to as many OEMs as Microsoft does and show them how its done... Apple and Google don't supply updates to as many people as Microsoft so theyre able to move quicker

You are comparing what happens with Windows while we are talking about smartphones market here; I heard the rumors about MS pushing directly, without OEM, less than ever carriers, involvement, updates to its mobile OSes since WM3 but it never happened.

I just don't see it happening but what do I know... But I too think Microsoft will certainly open up their check books much wider before we see the Chinese govt. snap their only hope for Windows Phone gaining worldwide traction. I think MS should've bought Nokia outright and just kept it as a separate division (like Skype). That way they could've slowly phased out their Asha and whatever other stuff Nokia is still fidgeting around with and concentrate on making WP even more affordable in the low end (even though they are already doing a fairly good job)...

I hope they save them from their delusion. I'd gladly buy a stock Android-powered Pureview Nokia shall Huawei buy Nokia and convince them to adopting a dual-platform ecosystem.

Wont happen, Android doesn't need Nokia and Nokia doesn't need Android. They were close to going under and Microsoft offered them a life raft, since then they have poured tons of money that they will have to pay back to Microsoft into developing apps and camera tech for WP devices. To switch to Android now would bankrupt them and would be tantamount to selling themselves to Microsoft for nothing. They don't have the money or staff to port everything they've made to Android.

lol so let me get this right, they want to use nokia to enter north America when nokia isn't really doing well in north America lol. back to the drawing board Huawei. just buy HTC.

nope

have not seen one. maybe they have very low end models... possibly, but i never seen a huawei, and i mostly check mid range+ and top models.

If they could make a GOOD Android phone (or maybe even a Nexus phone if they prod Google enough) with the exact same specifications as the Lumia 920, that could possibly be a good steal...

But for now

Lirodon said,
If they could make a GOOD Android phone (or maybe even a Nexus phone if they prod Google enough) with the exact same specifications as the Lumia 920, that could possibly be a good steal...

But for now

And that would be another nice Android phone that no one buys. No, thanks. Nokia+WP make sense. Another Android handset maker does not.

Weissmeister said,

And that would be another nice Android phone that no one buys. No, thanks. Nokia+WP make sense. Another Android handset maker does not.

Yes, lets make more of that which doesn't sell.

Weissmeister said,

Another Android handset maker does not.

You do realise that Huawei make Android phones already?

Raa said,

You do realise that Huawei make Android phones already?

They in fact, do. But most of their US phones are on the low-end range, or (in a similar style to how HTC used to do things) re-branded white label phones. And I know for a fact that Wind Mobile (one of Canada's AWS carriers) seems to carry a lot of Huawei phones too

webdev511 said,
You can file this under "Things that are VERY unlikely to happen".

Yes because that $3.3 trillion in reserve currency isn't burning a hole in Chinas pocket

With low yields on debt China has been buying higher yield infrastructure for some time and I don't see this stopping any time soon. Huawei, a Chinese state firm could easily borrow $12/15 billion at almost 0% to buy Nokia, indeed China has the cash reserves to buy Microsoft if it wanted.

Nope. US can even use money from China to buy Microsoft ...

Depicus said,

Yes because that $3.3 trillion in reserve currency isn't burning a hole in Chinas pocket

With low yields on debt China has been buying higher yield infrastructure for some time and I don't see this stopping any time soon. Huawei, a Chinese state firm could easily borrow $12/15 billion at almost 0% to buy Nokia, indeed China has the cash reserves to buy Microsoft if it wanted.

StandingInAlley said,
Haha! I think MS will be more interested in acquiring Nokia

They better start writing the check......

yardmanflex said,
.... besides Huawei,cheapen everything they touch..

Really?
The LTE radios that my carrier uses work fine. I don't think they're cheapened in any way.

I don't know enough about Huawei to be excited, scared, or what. I do love my Lumia, though, and would he saddened to see Nokia leave the WP market. Granted, I'm sure they'd make some amazing Android devices...

WTF.. I also want to buy Nokia, I'm open minded..!
I dnt know.. but It seems Nokia's market value is > Huawei's itself. At 1st I thought nokia is buying Huawei.!

salmanmansuri said,
WTF.. I also want to buy Nokia, I'm open minded..!
I dnt know.. but It seems Nokia's market value is > Huawei's itself.

I was thinking the same thing. I can't imagine Huawei is worth all that much comparatively speaking...

salmanmansuri said,
WTF.. I also want to buy Nokia, I'm open minded..!
I dnt know.. but It seems Nokia's market value is > Huawei's itself. At 1st I thought nokia is buying Huawei.!
How can Nokia be worth more than the Chinese government? Huawei is essentially the telecommunications arm of the Chinese government.

ahinson said,
How can Nokia be worth more than the Chinese government? Huawei is essentially the telecommunications arm of the Chinese government.

Huawei's revenues are about 10% greater than Nokia's. However, the bulk of Huawei's revenues come from telecoms infrastructure equipment -- not from mobile phones.

Thus, a Nokia acquisition would double or even triple the size of Huawei's mobile phones division. This would be a very large acquisition to digest.

I think Huawei has to step over Microsoft if Nokia is up for acquisition. How can he thinks Microsoft will just stand silent to watch them taking over Nokia and ditching WP.

No way !!!

MDboyz said,
I think Huawei has to step over Microsoft if Nokia is up for acquisition. How can he thinks Microsoft will just stand silent to watch them taking over Nokia and ditching WP.

No way !!!

Yeah, at best this will force Microsoft to put more money into Nokia...

M_Lyons10 said,

Yeah, at best this will force Microsoft to put more money into Nokia...

Or may be force them to finally acquire Nokia outright.

Or Microsoft can just buy Nokia, and Nokia will become their mobile division.

M_Lyons10 said,

Yeah, at best this will force Microsoft to put more money into Nokia...

M_Lyons10 said,

Yeah, at best this will force Microsoft to put more money into Nokia...


China's pockets are deeper than even MS ones though.....

Yeah, but now it's Huawei, not China itself you know. Huawei barely has as much revenue as Nokia, so it would require Huawei to sell itself to acquire Nokia lol.

Nokia's pockets are a lot bigger than Huawei though... Totally surprised that they thought they could afford to purchase Nokia...

Fritzly said,

China's pockets are deeper than even MS ones though.....

Microsofts Pockets are more then deep enough to make buying Nokia too expensive to be worth it.

For the record:

- Nokia revenue: 30 billion USD
- Huawei revenue: 30 billion USD
- Microsoft revenue: 70 billion USD

That makes ANY kind of acquisition highly unlikely. You can't just throw half (or even all) of your revenue out of the window.

bviktor said,
Yeah, but now it's Huawei, not China itself you know. Huawei barely has as much revenue as Nokia, so it would require Huawei to sell itself to acquire Nokia lol.

LOL... Huawey is basically owned by China therefore the company could obtain a line of credit from the Bank of China at 0% interests.... LOL
Said that I do not mean that it will happen but simply that, technically, it is feasable.

Edited by Fritzly, Jun 18 2013, 10:08pm :

Huawey (sic) is "owned by China"? What a dumb thing to say. I suppose Nokya is owned by Europe then?

FYI: The Bank of China deals in the Chinese currency, Renminbi, which is not convertible. So how could Huawei borrow money from them to buy Nokia? Would Nokia's shareholders take Chinese currency which they can't exchange for Euros or dollars?

Sheesh.

Major Plonquer said,
Huawey (sic) is "owned by China"? What a dumb thing to say. I suppose Nokya is owned by Europe then?

FYI: The Bank of China deals in the Chinese currency, Renminbi, which is not convertible. So how could Huawei borrow money from them to buy Nokia? Would Nokia's shareholders take Chinese currency which they can't exchange for Euros or dollars?

Sheesh.

Do you have any idea of what a Central Bank is and operates?
Anyway:
http://en.wikipedia.org/wiki/L...y_foreign_exchange_reserves

bviktor said,
For the record:

- Nokia revenue: 30 billion USD
- Huawei revenue: 30 billion USD
- Microsoft revenue: 70 billion USD

That makes ANY kind of acquisition highly unlikely. You can't just throw half (or even all) of your revenue out of the window.

Company's aren't acquired for the sum of their revenue. How much you sell has nothing to do with the sale value of a company.

-Forjo

MightyJordan said,
When I read the title, I thought it was Nokia acquiring Huawei, not the other way around.

I bet Microsoft will do anything either keep Nokia alive as they are or if all mean fails, they will buy Nokia paying paying more than what any other company would offer to save its Windows Phone from extinction

Lets not forget that Microsoft has supposedly been working on a Surface Phone and if that phone is already designed and ready to go; they could let Nokia do what it needs to do to survive then Microsoft could focus all its attention on its own product. However, I don't think that's likely to happen. I think they'll fight for Nokia.