Home Industry Deals Will Huawei buy Nokia?

The Chinese giant says it is ‘open’ to the idea of buying the troubled mobile phone maker.

A senior Huawei executive has said that the company is considering buying Nokia, but it depends on whether Nokia wants to sell. But everything has a price.

Richard Yu, chairman of Huawei's consumer business group, said at the London launch of the company’s Ascend P6 smartphone that: “We are considering these sorts of acquisitions. Maybe the combination has some synergies, but that depends on the willingness of Nokia. We are open minded.”

His comments were made at an open forum and published in London’s prestigious Financial Times newspaper. They come at a time when the Finnish mobile phone company, once the industry leader, is struggling to remain relevant. It has bet the company on Windows Phone, much to the displeasure of many shareholders. Nokia has refused to comment on the speculation, or even whether talks with Huawei are taking place.

At Nokia's recent annual general meeting in Helsinki many shareholders asked CEO Stephen Elop to consider approaching Google for an Android deal, even if it would ‘hurt’. Elop had previously said the company would take two years to implement its Windows-only strategy, but two years on and Nokia is still struggling to regain market share lost to Samsung and Apple.

Microsoft has also been touted as a potential purchaser of Nokia. Last year there was a flood of rumours that Microsoft had considered buying Nokia, but had decided against it, because of Nokia’s lousy balance sheet.

It will all come down to price. Nokia’s share price has improved considerably over the last year – though not in recent months. Its market capitalisation is around US$14 billion, compared to about US7 billion at its lowest point. But it is much, much less than the company was worth at its peak, and Huawei could well afford it.

Huawei to buy Nokia? Stranger things have happened. The deal would probably work well. Remember what they said  when Lenovo bought IBM’s PC division, and now it is one of the world’s most successful hardware companies.

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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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