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As the new year begins, speculation has again arisen that 2013 will be the year that Microsoft buys Nokia.

Six months again there was a spate of news stories based on rumours that Microsoft had considered buying the struggling Finnish company, but had decided against it. Microsoft is also reported to have made an approach in 2011, but was put off by Nokia’s lousy balance sheet.

But such is the world of high technology that things look very different now. Consider what has happened in the last few months. The most relevant development has been the release of Windows 8, in reality three different operating systems for three different platforms, but with the same look and feel. One of these platforms is of course Windows Phone 8, and Nokia is shaping as the main hardware supplier.

Microsoft is now much more than a software company and has no problem selling hardware. It doesn’t have its own phone (forget the ill-fated Kin, which fortunately never made it to Australia), and it envies Apple’s vertically integrated model. Buying Nokia would make perfect sense, and would be an ideal product fit.

Unfortunately for Microsoft Nokia’s share price has improved considerably in recent months. Its market capitalisation is around US$15 billion, compared to about US7 billion when the acquisition speculation first emerged. But it is much, much less than the company was worth at its peak, and Microsoft could well afford it.

Apple has stumbled a little with the iPhone 5, and Android is growing stronger. Windows Phone 8 can be a contender. Consider this question – would Windows Phone 8 do better if Microsoft owned Nokia, or of it did not?

Stranger things have happened.

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Graeme Philipson

Graeme Philipson is senior associate editor at iTWire and editor of sister publication CommsWire. He is also founder and Research Director of Connection Research, a market research and analysis firm specialising in the convergence of sustainable, digital and environmental technologies. He has been in the high tech industry for more than 30 years, most of that time as a market researcher, analyst and journalist. He was founding editor of MIS magazine, and is a former editor of Computerworld Australia. He was a research director for Gartner Asia Pacific and research manager for the Yankee Group Australia. He was a long time IT columnist in The Age and The Sydney Morning Herald, and is a recipient of the Kester Award for lifetime achievement in IT journalism.

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