Microsoft again rumored to be in talks to buy Nokia’s smartphone division, Elop to resign next year

Microsoft is talking with Nokia about buying the Finnish company’s smartphone division, along with two factories. How many times have we heard this before? Too many to count, really, but today we’ve heard it once more.

Interestingly, most of these ‘Microsoft will buy Nokia’ rumors tend to come from the same source: Eldar Murtazin, the Russian journalist who has famously leaked the fact that Nokia was going to switch its smartphones to Windows Phone before anyone even considered that it could happen.

Despite not believing that at first, after it actually happened, I vowed never to simply dismiss anything that Mr. Murtazin says again. After all, Nokia switching to WP sounded quite preposterous at the time – yet it did happen. So if Microsoft snatching up Nokia’s smartphone unit sounds absurd right now – well, it may just happen.

Image via IntoMobile

And if it won’t, don’t start shouting that “Eldar was lying!” (as some people like to do). The two companies are talking about this, I’m sure. But those talks don’t always lead to action. So perhaps they’ll eventually decide not to go through with the deal. That doesn’t mean there were never any talks.

Now that we’ve got that settled, let’s take a look at what Eldar Murtazin actually said about this takeover (complete with my comments).

Nokia’s and Microsoft’s head honchos (including Stephen Elop and Steve Ballmer) will meet up in Las Vegas (CES is a great excuse apparently) and discuss the deal. It may even get finalized over there. If it goes through, it will happen in the second half of 2012, and will involve Nokia’s smartphone R&D, as well as two plants.

The Nokia brand wouldn’t be used by the new unit under Microsoft. Instead, Microsoft will presumably sell own-brand Windows Phones. This may have been a requirement by Stephen Elop (perhaps to not confuse consumers).

That’s because Nokia will continue to exist (sans smartphones, at first) and make and sell ‘dumbphones’ (featurephones). They’ll also have an updated device category which will in the future compete with smartphones (perhaps a new ‘smart’ OS born out of S40 or the likes).

Apparently it’s all up to Microsoft right now. If they decide to go through with the deal, it will happen. If not, it won’t. But Nokia seems to be pretty much happy with the state of what has already been negotiated. That said, Microsoft is still unsure if it actually needs hardware R&D and manufacturing plants in-house. However, it sure would like to get its hands on Nokia’s smartphone-related patents (to use against Android makers, undoubtedly).

Nokia’s new Chairman will be Risto Siilasmaa, who will replace Jorma Ollila. His main goal will be to finalize this deal and then find a CEO to replace Stephen Elop with. That’s because Elop will resign in 2012 (supposedly heading back to the Microsoft mothership if the deal goes through).

Microsoft partners aren’t happy with the state of Windows Phone, yet Microsoft still believes in it and would like it to be its next successful product, replicating the Xbox. Google’s acquisition of Motorola makes for a good example of hardware-software integration in this space, along with Apple of course. An example that Microsoft could decide to follow. After all, they’ve been copying (nay, emulating) Apple’s mobile unit in every other respect (just consider how locked-down the entire WP experience is, and don’t forget Zune), so going for that famous Apple tight integration next just makes sense.

Just like the Nokia-Microsoft deal over Windows Phone did. All of these things make a lot of sense for Microsoft. If you’re wondering if they’ve ever made any sense for Nokia, that’s a good question.

One way or the other, this year we’re bound to find out whether Elop was in fact a trojan horse planted inside Nokia just to make it cheaper so Microsoft could buy a part of it. That’s exciting.

Author: Vlad Bobleanta

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  • Anonymous

    This doesn’t make any sense.  Why would MS pay a premium for this business when it can have its cake and eat it too under the alliance.  The execution between the two companies seems to be working and clearly any form of tighter integration beyond the alliance might well pose a threat to other MS-OEM deals.  In addition, Nokia would lose a lot of supply chain AND distribution benefits by breaking up its manufacturing.  Especially as the feature phone and smartphone segments begin to converge on the low end of the spectrum.  I’d rather listen to Donald Trump for financial advice than take a rumor from Eldar as fact.  

  • Anonymous

    MS does not need to get into the business of manufacturing cellphones……Tablets maybe

  • Jimbo

    Well, like the article stated, Nokia using Windows Phone 7 didn’t make any sense either, and in fact, the company kept denying it……right up until the Ballmer-Elop press conference.

    It’s no guarantee it’ll happen, but no doubt, talks about the subject have very likely taken place behind the scenes with representatives of both companies.

  • mitchell sheehan

    Well if this does happen, it will not only disappoint the hard core Nokia fans but also totally break them. . this would also bring disaster to Nokia as a brand. .Nokia might as well just close then. . Better than having Microsoft take over the once best phone brand in the World. Well like the saying goes, a CEO will either make or break the company.