Should Microsoft buy Nokia?

Moderated by Jason Hiner | May 6, 2013 -- 07:00 GMT (00:00 PDT)

Summary: Two years ago, Nokia ditched Symbian and adopted Windows Phone. What's next for these mobile partners?

Jo Best

Jo Best

Win-Win

or

Lose-Lose

Ben Woods

Ben Woods

Best Argument: Win-Win

56%
44%

Audience Favored: Win-Win (56%)

Closing Statements

A marriage made in heaven

Jo Best

If reports are to be believed, investors have had enough of Nokia CEO Stephen Elop's strategy for the company.  Who can blame them? Shareholders don't care about hardware choices or operating systems, they care about cash, and Nokia has delivered decreasing amounts of that of late. If Microsoft was in the market for a Nokia buyout, it would be a good time to start waving its checkbook around. With shareholders so disgruntled, it could pick up a bargain.

 For a few billion, it could pick up all that hardware expertise, a solid partner for Windows Phone, presence in emerging mobile markets, sizeable R&D functionality and some nice consumer offerings to fix up Bing with. Microsoft meanwhile would just have to deliver two things to make its offer appealing for Nokia: enough cash and enough patience to safeguard the handset maker's future.

The two companies have been moving closer and closer even before the Windows Phone deal - a buyout would just be the consummation of a marriage many have long expected.

A huge mistake

Ben Woods

Microsoft buying Nokia would be a mistake, it really doesn't need to and can only result in a lose-lose situation. Neither company name is doing well in driving demand in the mobile market – I'd bet the last time you heard someone go into a shop and specifically ask for the latest Nokia phone was a fair while back, and while (as Jo argues) a deal might provide some synergies, Microsoft is really getting all it wants and needs out of this deal, without being responsible financially and reputation-wise to what happens to a brand such as Nokia. Even buying it for the patents could end up being a dicey move - think about Google's purchase of Motorola, a similar move which has since seen many of the patents declared standards-essential, meaning other manufacturers rely on using them too under fair licensing terms.

The expression 'Why buy the cow when you get the milk for free?' springs repeatedly to mind whenever I think about this deal. 

Microsoft is already getting as much as it needs out of the deal, buying the company exposes it to more risk, rather than more opportunity, and as long as Windows Phone can perform for Nokia, there's no reason to buy the company as a defensive move to stop it jumping ship to another platform. If Windows Phone can't perform well with the backing of a handset maker like Nokia, buying the company won't fix it as the problem won't be who manufactures the handset it'll be the software inside and the user experience, which, once again, wouldn't be helped by buying Nokia.

Why buy the cow when it's already paid for the milk?

Jason Hiner

This is one of my favorite debates that we've done as part of the Great Debate series because Jo and Ben both know the topic so thoroughly and have such widely divergent perspectives on it. Because they both argued their side so well, I've admittedly gone back and forth several times in terms of which one makes the stronger case.

In one sense, I'm not sure why Microsoft would buy the cow when it's already paid a billion dollars for the milk. But, with Surface, Microsoft has shown that it wants to make its own branded devices but that it's not exactly an expert at it. Buying Nokia would give Microsoft a huge shortcut. From Nokia's standpoint, its brand has lost some of its luster but it still has a center of excellence around mobile hardware and becoming an arm of Microsoft would allow it to focus on what it does best. With that in mind, I'm going to give Jo the nod on this one.

Talkback

82 comments
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  • Kiss Nokia's Innovation Goodbye...

    Not that Nokia's been doing anything major lately, but if M$ buys them out, innovation will crushed out.
    hunter-seeker
    Reply 1 Vote I'm for Lose-Lose
    • not if MS knows when to be hands off?

      But yes I understand your utmost doubts.... I only voted for green because I'm done w/ Nokia's current all eggs in one basket approach anyways. Might as well let MS get fuller than full access (if that's not happening already..), look at their options and ante up WP and probably Surface phones properly.
      7th_Hayreddin
      Reply Vote I'm Undecided
      • Nokia died two years ago...

        ...and that's why it's all the same if M$ bought it or not. Not many years ago Nokia got 40% of both mobiles and smartphones. Now - 3%. At the same time Android has conquered

        1. Smartphone market........... 75,6%
        2. Tablet market.................... 56,5%

        Best men and women have already left Nokia... some to Jolla.... some to other IT-companies ...some to public service sector. Some of them are so tired of unstable IT that they are re-educated themselves to teachers, nurses, media etc....
        Napoleon XIV
        Reply Vote I'm Undecided
  • Best move ever by Microsoft

    Nokia Lumia running Windows 8 are the best smartphones out there today.

    1. Nokia designers are the only ones in the industry that have some imagination. Compare a Nokia Lumia 920 or 720 with a Samsung, HTC or the ageing iPhone.

    2. Nokia develops the best cameras for smartphones. Read the reviews or ask users.

    3. Nokia knows mobile system design best.

    4. Best mobile patent portfolio on the planet.
    The_observer
    Reply 12 Votes I'm for Win-Win
    • Too early.

      Agree with your points, altough I cannot state them that enthusiastically because I got one of the early batches of Lumia 920 which are riddled with manufacturing defects.

      I don't agree that the 2 of them merging would be a benefit, tough. The Microsoft brand is too polarizing as a consumer brand, and the Microsoft haters would harm the Nokia brand more than they do now, if Nokia were owned by Microsoft. Microsoft benefits from Nokia primariliy because of their consumer brand, which is worth several billion $ to Microsoft, but that value would shrink if Nokia were acquired.

      Since I have Nokia shares I would not mind a Microsoft buyout, tough.
      Sacr
      Reply 2 Votes I'm Undecided
      • Nokia Brand

        The Nokia brand is huge in some countries, but Microsoft can buy Nokia and keep the Nokia brand. Also, Microsoft buying Nokia would give people the confidence that Nokia will be there for tech support, warranty claims, and keeping the HERE services and all of the Nokia apps functioning with continued future development.
        rmark@...
        Reply 4 Votes I'm Undecided
        • Nokia is big only in memories...

          ...but in real hectic life there are just a small kiosk now.

          Android: 75,6% vs. Lumia 2,9%

          Read the numbers and think about how was it possible that company like Nokia collapsed so heavily before and after Microsoft captured it. Because in reality - Nokia is owned even now by Microsoft. It's not at all independent company.
          Napoleon XIV
          Reply Vote I'm Undecided
    • Been There, Dropped Them

      This is the Google/Moto discussion all over again.
      Botom line, where is the ROI for MS?
      Not seeing it.
      Aside from that, would US regulators even allow it? Then there is the big EU question.

      Personal opinion: Noka devices are gimmicky and second rate in my eyes. I am still firmly in the Win7/Android camp.
      rhonin
      Reply Vote I'm Undecided
      • My Nokia 920 has NEVER crashed.

        Six months of use and not one crash or dropped call. Cannot say the same about the previous Android (AT&T Captivate, Android 2.1), which was a horrific mobile device. The iPhone before that was not as bad, but no where near the quality of the 920.

        MS / Nokia the way it is, is not broke, and needs no fixing.

        There is no advantage to either in a merger. MS is already doing everything possible (e.g. financial, technical) to help Nokia succeed with the WP platform.

        While WP is a tortoise in the mobile race, they still have what history proves to be required to win whereas APPL and GOOG do not.

        Think Ford-Toyota, Leitz-Nikon, Smith Corona-IBM Selectric, Fairchild-Intel, Apple-IBM, Novell-MS, Lotus-MS, Ashton Tate-MS, Yahoo-Google.

        History proves that early adopters and first successful market implementations of technology almost (cannot think of one, 3M?) NEVER win a long term race.
        Patrickgood1
        Reply 1 Vote I'm Undecided
    • The BEST doesn't alway breed a winner ...

      ... (but you probably don't remember Betamax). Microsoft certainly has the resources to keep Nokia afloat but such an acquisition would put Microsoft in a position to compete against HTC and Samsung. HTC is a Windows Phone 8 partner and Samsung is not only a Windows Phone 8 partner but also a Windows 8 partner. Plus, Samsung and HTC are more stable vendors who do not have all their eggs in one basket.
      M Wagner
      Reply 2 Votes I'm Undecided