Huawei CEO Says Could be Interested in Acquiring Nokia but that Windows Phone is 'Weak'

So very briefly - late nite hotel, early departure tomorrow...

 

The Financial Times just wrote a few hours ago that Huawei CEO said yeah, they could be intersted in acquiring Nokia, but it would require Nokia's willingness (ie he'd not be interested in a 'hostile takeover'). He added - rather mischievously to me, considering Huawei also provides Windows Phone based smartphones while its majority is of course on Android - that Windows Phone is 'weak' yet one has to pay a license for it. This compared to the much stronger Android which is free. 

Yeah - Hello Nokia investors and Board. Fire the Microsoft Muppet! Elop has driven Nokia to the gutter. And those of the Board members who don't stand up to fire Elop, should also be fired. There is no excuse for Nokia killing the world's most praised OS - the only one regularly rated better than the iPhone (MeeGo) in favor of Windows Phone, if even other Windows partners see that Windows Phone even in its current WP8 edition is garbage - ok, or 'weak' as in Huawei's CEO's words.

Also there is some gossip about Lenovo, that while its looking at NEC and Blackberry, it 'should' also consider buying Nokia. Maybe finally now, we will see the bidding start on Nokia, and most likely, that Nokia would be split by the buyer(s) and various other companies. And that Elop finally gets what he deserves - to be fired.  (more and longer blogs to resume soon, as I wind down the end of this Spring's heavy travel, consulting and speaking season)

Comments

[Kenny]

So Microsoft is not interested in buying Nokia? I suppose since Nokia is already acting like its faithful servant and lackey there is no advantage for Microsoft to own Nokia. Or put it another way MS already owns Nokia lock, stock and barrel without having to pay for it.

[Kenny]

Nokia's N9 sold 2 million in first quarter and then went on to sell another 4 million at least. This was despite Elop declaring MeeGo a dead os with no more models coming and refusing to sell N9 in all major markets for fear it will do better than Lumia. What would have happened if Nokia had thrown its full weight behind MeeGo? Nobody knows for sure but to dismiss it as not going to succeed is overly biased or pessimistic or both.

[Jac]

Huawei later clarified after the FT article that they had no plans to buy Nokia.

http://www.businesstimes.com.sg/breaking-news/technology/huawei-says-has-no-plans-buy-nokia-20130619

[J.O. Aho]

@Kenny:
Microsoft has access to all Nokia patents, so they don't really have any use of Nokia any more.

[Kenny]

>Microsoft has access to all Nokia patents, so they don't >really have any use of Nokia any more.

True, @J.O.Aho, why would Microsoft want to buy Nokia when it has already got all it wanted without having to pay for it? Nokia is completely focused on WP to the exclusion of all other platforms so what more do they want?

As for Nokia's attractiveness to other companies this is doubtful. There is little R&D assets or manufacturing capacity left in Nokia now and whatever R&D assets is focused on WP. Nokia is fulling dependent on WP which is controlled by MS. Why would any company want to buy a company which MS can shut down with the stroke of a pen?

[Tencent]

@Kenny for the patents the last piece of nokia that has any real value.
And of course NSN, which might still be bringing in a little profit.

[Jusu]

Huawei has great Android phones (Ascend P6 and Y300 to name couple). Nokia has best WP phones (e.g. 520 is great value). So Huawei+Nokia would be a real killer!! NSN is OK for Huawei as well.

Yeah and Elop could seek new job challenges and start learning sentences like "Do you want ketchup with that?" and "Please, drive thru."

[CC]

@Jac, that is not much of a denial, really, as it does not run contrary to what Richard Yu said. Compare:
- Richard Yu: "We are considering these sorts of acquisitions; maybe the combination has some synergies but depends on the willingness of Nokia. We are open-minded."
- Bill Plummer: [Huawei] "has no plans to acquire Nokia"

I.e., Mr Yu said that they are not against it if it makes business sense, and Mr Plummer just said that there are no [concrete] plans. That could mean, for example, that they are discussing it internally on a senior level, but that they have not taken any step towards making it happen. In case other companies show more substantial interest in Nokia, that could change very quickly.

[e_lm_70]

@Kenny

Excluding NSN, that would be a great asset fo Huawei for compete at same level, or even pass over Ericsson. But about NSN, it has to be seen if Anti Trust would allow Huawei to get over NSN ...

Acquiring Nokia has a value for two points:

The brand Name ... Nokia outsell HTC with Windows Phone by 1:8 factor. Why ? Because of brand power ... in some market, the latin market, Nokia has been always strong and now it is getting momentum with the new cheap Lumia.

Camera Technology ... Nokia PureView (the one from 808, not the PoorView from Lumias) ... it is extremely valuable for any smartphone producer.

But ... Huawei was smart on say .. no hostile take over ... the American Funds and Microsoft will never allow any friendly take over, and make an hostile one, would be get in war with these super power ... so Huawei, just made clear they don't want to attack this super power

[e_lm_70]

In other words ... NO ... nobody will take over Nokia ... and eFlop will stay in Finland for many more years ...

Unless ... some judge in Finland will wake up, and open a case over the crimes made my eFlop and friends ...

[AtTheBottomOfTheHilton]

We already have an example of that, Volvo cars. Volvo merged with Ford 1999 and during that time Volvo lost a lot of the competence and innovation. According to former Volvo CEO Stefan Jacoby, Volvo could not compete with German premium brands because they lost competence during the Ford era. Now Volvo cars has been acquired by Geely, a Chinese car manufacturer and the prognosis is that Volvo cars will not be able to sustain for much longer because they lack new models and losing market share. However, Volvo is a great opportunity for China as they previously lacked the competence in building safe cars. They will now gain this competence while moving production from Europe to China but in total this is a loss for Volvo.

My point is that Nokia would not gain anything by being bought by a Chinese company. What Nokia should do is to sit the contract with Microsoft out and then salvage what they have left.

[Bong]

Being bought by a Chinese company is still a much better prospect than continuing to be Microsoft's little bitch.

In fact, Huawei has a rich R&D culture and plenty of patents... something like the Nokia of old times, until Elop the Microsoft troll came along.

I want a Nokia phone but I refuse to have those crappy tiles, Internet Explorer, Bing, Skydrive etc. shoved down my throat. Judging my the poor sales of Nokia Lumia phones, I do not think I'm the minority.

If I need to get a Nokia phone, I'd rather get a Nokia Asha phone.

[Tester]

Saying that Microsoft doesn't need Nokia is naive. MS doesn't need Nokia the company, but they definitely need Nokia the brand.

The only reason WP is selling as much as it does is the Nokia brand. Should anyone else buy Nokia and stop the insanity it will be extremely hard for Microsoft to find someone else to market their OS. The entire industry, with the sole exception of Apple, Blackberry and Nokia is focussing on Android and these three only survive thanks to brand recognition. Windows Phone without Nokia is an empty shell.

[Spawn]

@The Wild One

> Windows Phone ecosystem will grow in the next years

Only because within last years it shrinked so much that it reached the bottom and now it only can stall or grow again a bit.

> while iOS is loosing market share and Android will start losing market share

Possible. But taken all the new alternates like BB10, Jolla, Firefox, Ubuntu into account and past years WP "success" when no alternates where present its more and more unlikely that WP grows beyond its niche.

They had a window of opportunity, missed it and its closing now.

> So why would Nokia abandon a growing ecosystem?

Cause growing from 2% market share to 3% market share isn't exactly what they aim for?

> Also why is Huawei CEO badmouthing Windows Phone when he is selling them

That's not badmouthing but known and public visible facts confirmed by Bill Gates himself with even much stronger words. Only idiots like Elop would deny that yes, WP failed.

[Spawn]

@Tester

> MS doesn't need Nokia the company, but they definitely need Nokia the brand.

Its just that it didn't helped them. Its not enough and Nokia's brand is already vanishing like near all of its ex-loyal customer-base just vanished within 2 years.

Without Nokia WP would be even more dead. But with Nokia WP isn't alive either. If its the brand then they could buy that for some pennies from whoever takes over and splits Nokia. But that's by far not enough.

Microsoft failed with Surface too. Soon Surface 2 comes, will it fail? Would it change anything if named Nokia Surface Lumia?

There next try seems to be to compete on price. What else? What if that fails too (and it will)? One thing is clear, Nokia even back then when still number 1 got killed trying. Collateral damage. They are not much worth now.

[Tester]

@Spawn:

>> Its just that it didn't helped them. Its not enough and Nokia's brand is already vanishing like near all of its ex-loyal customer-base just vanished within 2 years.

That may be true - but Nokia's name still got some power here in Europe. Microsoft needs every last bit of that to remain relevant.

>> Without Nokia WP would be even more dead. But with Nokia WP isn't alive either.

True, so...

>> If its the brand then they could buy that for some pennies from whoever takes over and splits Nokia. But that's by far not enough.

I think that anyone interested in Nokia wouldn't even think of selling a valuable brand name 'for pennies' to someone like Microsoft. Seriously, the name is probably the only thing of value that's left for Nokia.

- NSN got no future, with Siemens planning to get out.
- The feature phone business is imploding right now.
- as you said WP (Lumia) isn't really alive. Who would want that - especially a competing manufacturer?

I see 3 fields of business here nobody would want to buy. So before Nokia is sold all of these need to be shrunk far enough that they won't present a large heap of cost to any potential buyer.

Think about it: Lenovo and Huawei have absolutely no brand recognition value here in Europe. Nokia does. If any of these Chinese companies could get the name Nokia and release some quality Android phones under that name, it'd be a home run. Finally all those customers who demand a Nokia (there's still lots of them!) could finally get something competetive!

[CN]

@Tester

"NSN got no future, with Siemens planning to get out."

Anybody who has been close enough to see what the merger is, was and is likely to be and the ones who know what was Siemens' or Nokia's role in it has been, disagree with your statement 100%. Today, NSN is so damn close to what Nokia Networks was before 2007 that it's hard to believe. I say that without Siemens, NN would have had troubles to survive, but then again the merger was probably the best option of all the bad ones.

Now, NSN can become something good and the less Siemens plays a role in it's future, the better.

[Tester]

If Nokia has enough money, that may be true. But if that was the case there wouldn't be such persistent rumors of Nokia being bought out. NSN is sure a viable company, the main question is whether Nokia can and will hold on to it.

I still expect NSN not to be part of Nokia anymore when the time comes to buy the brand name without the baggage.

[Stoli89]

The biggest reason MSFT might want to buy Nokia at the moment is 1) to find a very nice place to park its offshore profits and avoid tax exposure upon repatriation of these retained earnings. Of course, parts of Nokia may be of strategic interest to MSFT, but why pay a control premium for assets Redmond can already leverage under the strategic alliance? As for any other potential suitor...MSFT is one big reason they will not surface unless it is to play a risky game and try to bid up Nokia's price to the detriment of MSFT shareholders.

IMHO, and aside from the tax optimization opportunity, MSFT has its cake and can eat it too. As for Nokia...they are at the cusp of a recovery, post major restructuring (more to come, but the corner has been turned), so why sell at a discount(?)...even with a reasonable control premium it's not very interesting IMO.

Maybe next year, 2H14, the fog might clear more and Nokia shareholders may be more amenable to sell. At this stage, I highly doubt it...without a control premium that would make the acquiring shareholders balk.

Lastly, MSFT would essentially have to change its business model (OEM integration, like Apple) to acquire Nokia. Great when your growing like hell in an immature/disrupted market where margins are HUGE (yesterday). But when the market matures a bit, margins erode, and growth levels plateau(tomorrow)...not so sure MSFT needs to jump at that.

[jbernardo]

Well, MSFT has given up on buying Nokia - http://www.theregister.co.uk/2013/06/20/microsoft_nokia_merger_no_go/ - and apparently they even support Tomi's analysis - "Microsoft was said to be leery of Nokia's weak position in the smartphone market, where it currently trails behind Apple and Samsung."
I wonder who is the guilty party, the responsible for that weak position?