Rumor: Microsoft to acquire Nokia's phone unit for $19 billion [update]

 

Over the past few months we have heard little come from Nokia and Microsoft regarding their mobile partnership. Today, speculation has arisen that suggests that Microsoft is set to make a $19 billion acquisition of Nokia’s phone unit.

Eldar Murtazin, a Russian mobile blogger and industry insider, suggested that the acquisition was on the table as he tweeted “One small software company decided last week that they could spent 19 bln USD to buy a part of small phone vendor. Thats it.”

It is a big claim from the blogger, but he has a rather nice track record of leaking the correct information before an official announcement. Two weeks ago he suggested that Nokia and Microsoft were discussing the possibility of an acquisition that had the potential to be a closed deal by the end of the year. Additionally, he was one of the first bloggers to report about the initial Nokia partnership with Microsoft.

At this point the deal is simply a rumor, although one which could develop into an announcement by the companies sometime in the future.

To add fuel to the speculative fire, it makes logical sense for the acquisition to go ahead. Nokia CEO Stephen Elop was once a Microsoft Executive and the official announcement of Nokia Windows Phones has already been made. The first Nokia WP phones are likely to come in January 2012, by which time we’ll know if such an acquisition has been made.

Earlier this week, Neowin learned that Nokia planned on having their own app store for their Windows Phones range, in a plan to create a mega-database of three of their mobile operating systems.

Update: Due to the rumors circling, Nokia spokesman Doug Dawson has now come out and said that the rumors were '100 percent baseless'.

Report a problem with article
Previous Story

Report: Android-based phones consume more data than other phones

Next Story

Aliens Colonial Marines re-announced; coming spring 2012

47 Comments

Commenting is disabled on this article.

I wonder what would happen to the Nokia vs Apple lawsuit as Apple and MS seem to have an agreement not to sue each other or would this continue on the NON-phone Nokia

ie, if they sold of the phone, do they keep the telecomunications research bit

phono said,
"Eldar Murtazin, a Russian mobile blogger and industry insider"

LOL again... true insider


what's wrong? he (his site http://mobile-review.com) is really one of main mobile insiders, leaked lots of phones and information.

What would be the point? Microsoft have already bought tens of millions of Windows Phone sales per year for chump change through the deal with Nokia. Buying them out would be a waste of money.

CalumCookable said,
What would be the point? Microsoft have already bought tens of millions of Windows Phone sales per year for chump change through the deal with Nokia. Buying them out would be a waste of money.

Tens of millions ? Microsoft can't sell 1 million a year.

This is not going to happen, Microsoft buying nokia would alienate all the other companies microsoft has partnerships with right now. How could they afford to create a successful hardware company competing against their own partners and retain good relations with its partners? It makes no sense from a business perspective.

What do Nokia make besides phones and other handheld devices for Microsoft to acquire only the "mobile phone unit"? Siemens and some other subsidiaries?

xpclient said,
What do Nokia make besides phones and other handheld devices for Microsoft to acquire only the "mobile phone unit"? Siemens and some other subsidiaries?

They make a lot of high end stuff you as a consumer never see and never know about.
Phone centrals GSM Towers and base stations. and a tone of other high technology stuff that runs behind the scenes to make the consumer technology work. right now a lot of their profit, possibly most, comes from this department.

If this is true, why is MS spending all this money lately on failed/failing companies, it started with Skype and now Nokia who used to be good but lately are dire.

BeLGaRaTh said,
If this is true, why is MS spending all this money lately on failed/failing companies, it started with Skype and now Nokia who used to be good but lately are dire.

Skype isn't/wasn't failing though. I know literally a hundered plus people who use it and connect to more.

jbrooksuk said,

Skype isn't/wasn't failing though. I know literally a hundered plus people who use it and connect to more.

You can have millions of users and still fail! I may be wrong but skype wasn't a profitable business...

jbrooksuk said,

Skype isn't/wasn't failing though. I know literally a hundered plus people who use it and connect to more.

still it was in red

trollonknoll said,

You can have millions of users and still fail! I may be wrong but skype wasn't a profitable business...

Barley profitable because of overhead costs, now moving to Microsofts data centers and lets say making some very extensive deals with say Facebook, now you're talking a few billion in the bank at the end of the year.

Skype has 675 million users.

Joe05 said,

Barley profitable because of overhead costs, now moving to Microsofts data centers and lets say making some very extensive deals with say Facebook, now you're talking a few billion in the bank at the end of the year.

Skype has 675 million users.

with 670 million who don't pay a dime.

Who cares for Nokia? For 19 billion $ they could make Sahara green again and transform Africa to new economic superpower like China which would return trilions € of profit at the end of the century. Humanitarian bombing is already underway in Libya, after that they can begin to rebuld Africa...

6205 said,
Who cares for Nokia? For 19 billion $ they could make Sahara green again and transform Africa to new economic superpower like China which would return trilions € of profit at the end of the century. Humanitarian bombing is already underway in Libya, after that they can begin to rebuld Africa...

huh? What has this got to do with a rumor about one company acquiring another? Are you suggesting MS should use their money to fix environmental and economic problems in Africa?

I think it would cost significantly north of 19 Billion to fix that god forsaken place anyway.

You didn't even need Nokia to know that the rumor was completely baseless. Go to any stock market web site, and you'll see that Nokia's market cap is currently $25 billion -- even after the recent drop. Companies are acquired for a premium -- not for a discount.

Simply put -- Murtazin is crazy.

TomJones said,
You didn't even need Nokia to know that the rumor was completely baseless. Go to any stock market web site, and you'll see that Nokia's market cap is currently $25 billion -- even after the recent drop. Companies are acquired for a premium -- not for a discount.

Simply put -- Murtazin is crazy.

Yes, at the moment it is $17.62 Bn.

FMH said,
Nokia says the rumor is completely baseless.

Wouldn't surprise me if it were true. Microsoft has been using entryism to destroy competitors, neuter, or take them over for quite a while now. Yahoo, now Nokia.

Look at the timeline here:
1. Elop, a former Microsoft executive, becomes Nokia's new CEO.
2. He declares symbian dead and adopts Microsoft software instead.
3. Nokia's shares take a nose dive.
4. Microsoft buys Nokia at a huge discount.
5. Profit?

Flawed said,

Wouldn't surprise me if it were true. Microsoft has been using entryism to destroy competitors, neuter, or take them over for quite a while now. Yahoo, now Nokia.

Look at the timeline here:
1. Elop, a former Microsoft executive, becomes Nokia's new CEO.
2. He declares symbian dead and adopts Microsoft software instead.
3. Nokia's shares take a nose dive.
4. Microsoft buys Nokia at a huge discount.
5. Profit?

You're doing it wrong.

Flawed said,

Wouldn't surprise me if it were true. Microsoft has been using entryism to destroy competitors, neuter, or take them over for quite a while now. Yahoo, now Nokia.

Look at the timeline here:
1. Elop, a former Microsoft executive, becomes Nokia's new CEO.
2. He declares symbian dead and adopts Microsoft software instead.
3. Nokia's shares take a nose dive.
4. Microsoft buys Nokia at a huge discount.
5. Profit?

Now if only Nokia didn't just announce that SYmbian would be around for at least another 5 years. and if only Yahoo hadn't killed itself off by not accepting the buyout to start with. They where a sinking ship from before. MS offered them money and the head against he wishes of the stockholders said no, an doomed the whole company. your history is all wrong.

Also Elop was hired by the BOARD, for the specific purpose of changing Nokia's course from the doomed symbian+maemo course that was running them on ground to a MS Partnership after they dumped the old Anti MS head.

But it's nothing new that you rewrite history to something that sound better to you.

TomJones said,
You didn't even need Nokia to know that the rumor was completely baseless. Go to any stock market web site, and you'll see that Nokia's market cap is currently $25 billion -- even after the recent drop. Companies are acquired for a premium -- not for a discount.

Simply put -- Murtazin is crazy.

1: of course Nokia is going to deny it. just lke they denied the MS partnership untill the last minute
2: yes ALL of Nokia is worth 25Bn. however, MS is only buying the phone division wich alone wouldn't be worth anywhere near 19 billion.

Flawed said,

Wouldn't surprise me if it were true. Microsoft has been using entryism to destroy competitors, neuter, or take them over for quite a while now. Yahoo, now Nokia.

Look at the timeline here:
1. Elop, a former Microsoft executive, becomes Nokia's new CEO.
2. He declares symbian dead and adopts Microsoft software instead.
3. Nokia's shares take a nose dive.
4. Microsoft buys Nokia at a huge discount.
5. Profit?

Which means what? Yahoo and Nokia are two different situations, yes maybe there is some momentum on Nokias part to adopt Windows phone, but that thought that it's a Trojan horse is unrealistic, Steven Elop does nothing without approval of the Board of directors, and the last CEO was moved out of that position by the same board.

If this rumour proves true, it would be with the blessing of the Board of directors.

Their $1 billion partnership was a bad enough decision, are they ****ing retarded? This is why Ballmer needs to be fired. You can't buy your way into success.

Xero said,
Their $1 billion partnership was a bad enough decision, are they ****ing retarded? This is why Ballmer needs to be fired. You can't buy your way into success.

Uh, yes you can.

Xero said,
Their $1 billion partnership was a bad enough decision, are they ****ing retarded? This is why Ballmer needs to be fired. You can't buy your way into success.

How is SoundJam, er, iTunes working out for Apple?

Xero said,
Their $1 billion partnership was a bad enough decision, are they ****ing retarded? This is why Ballmer needs to be fired. You can't buy your way into success.

does he need to be fired for a rumor?... dont understand why, its a rumor, which can be true but also not true... and until it doesn't happen you shouldn't say Ballmer (who do you think should replace him? though) needs to be fired. when its true and they do what the rumor says you can say whatever they want, but remember wp7 update rumor and how it was all not true. but also some rumors end up being true like skype one. so lets wait and see what happens.

Alright, maybe I was a little harsh, but Microsoft has tried this strategy before and failed miserably. Throwing money at something doesn't give you a successful product, look at the Zune or Windows Vista. If Microsoft buys Nokia and starts making their own phones, it will effectively kill off any other OEM making a WP7 device. It's happened before with the Zune, and that turned out great!

My reasons for getting rid of Ballmer is he seems to just spend money rather than encourage in-house innovation. The tablet concept they had was great, but that was shelved. Under his reign Microsoft has spent an unprecedented amount of money that has had very little return in the long run. Money aside, it's affecting their reputation greatly, Microsoft isn't the company it used to be.

Xero said,
Their $1 billion partnership was a bad enough decision, are they ****ing retarded? This is why Ballmer needs to be fired. You can't buy your way into success.

Ballmer and the Microsoft board has become very radical and thats what I love about them. They pulled the plug on Windows Mobile, bought Skype and brought a radical UI(which they are expanding to all their products, even Office!). Opting Saas. And they are keeping their OEMs under tight control(Phone +Tablet). This is very unlike of them, and very unlike of Gates regime.

They understand, that to make radical changes, they need to take some radical actions which they have and are still doing so.

I hear you and understand your feelings towards Steve Balmer, but you have to remember that MS was under an injunction for the last 10 years that pretty much prohibited them from integrating any services and features post the XBox (which they just snuck in before the agreement). Its hard to innovate when your team of lawyers in the corner of every meeting keeps telling you that you can't do that under the agreement with the DoJ. In all fairness he has done a decent job securing and building up those individual services. Now that the agreement has expired, he's bringing all of those stand alone pieces together in Windows 8 and WP7/8. I'd give him a little time to see how things shake out for these two ecosystems before totally criticizing him.

Xero said,
The tablet concept they had was great, but that was shelved.

It is rumored that the new Windows Tablet will be shown off for the first time today. Courier was a prototype, a test device. From what you wrote, I guess you have some inside information and hands-on experience with Courier, enough experience to know exactly how it works. I guess you also have hands-on experience with the new device, enough experience to know exactly how i works. And with all this experience with both devices, you know exactly how much better Courier is than the new Win8 tablet to say that it is a failure.

How do you know what it is rumored they will show off today will not be the same, or even better than Courier? You do not, I do not, only a few select few know.

Xero said,
Alright, maybe I was a little harsh, but Microsoft has tried this strategy before and failed miserably. Throwing money at something doesn't give you a successful product, look at the Zune or Windows Vista. If Microsoft buys Nokia and starts making their own phones, it will effectively kill off any other OEM making a WP7 device. It's happened before with the Zune, and that turned out great!

My reasons for getting rid of Ballmer is he seems to just spend money rather than encourage in-house innovation. The tablet concept they had was great, but that was shelved. Under his reign Microsoft has spent an unprecedented amount of money that has had very little return in the long run. Money aside, it's affecting their reputation greatly, Microsoft isn't the company it used to be.

I agree with you 100 percent. It just seems like Microsoft is not creative like it use to be on it's own.

Xero said,
Alright, maybe I was a little harsh, but Microsoft has tried this strategy before and failed miserably. Throwing money at something doesn't give you a successful product, look at the Zune or Windows Vista. If Microsoft buys Nokia and starts making their own phones, it will effectively kill off any other OEM making a WP7 device. It's happened before with the Zune, and that turned out great!

My reasons for getting rid of Ballmer is he seems to just spend money rather than encourage in-house innovation. The tablet concept they had was great, but that was shelved. Under his reign Microsoft has spent an unprecedented amount of money that has had very little return in the long run. Money aside, it's affecting their reputation greatly, Microsoft isn't the company it used to be.

But what about XBOX? Nobody but Microsoft makes them and they sell pretty well. Why not with Windows Phone too?

Xero said,
Their $1 billion partnership was a bad enough decision, are they ****ing retarded? This is why Ballmer needs to be fired. You can't buy your way into success.

why exactly bad partnership
i think i correct way to rise your smart phone os

darkfanar said,

why exactly bad partnership
i think i correct way to rise your smart phone os

What? Buying **** is good for business? Did you realize that Microsoft will lose $19bn in cold hard cash? It takes 1.5 years to earn that much in profit based on past track record. Do you really think MS will be earning that much given that free ChromeOS is coming, iPads are taking the tablet marketshare, Android too is gaining, and, ultimately, Macs are gaining market share? Windows 8 has to play almost 5 years of catch up from the time when it will be released in 2012 to go back to its past sales levels. This would make the end of MS a lot quicker than everyone is hoping.