Huawei 'considering' Nokia acquisition: report

Huawei 'considering' Nokia acquisition: report

Summary: The Chinese smartphone giant is "considering" buying Nokia, but it all depends on whether or not the ailing Finnish phone maker finally cracks.

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TOPICS: Nokia
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(Image: CNET)

Huawei would consider snapping up Nokia, which could help it boost its smartphone gains in Europe and the U.S., a company executive said on Tuesday.

According to the Financial Times of London (paywall), Richard Yu, chairman of Huawei's consumer business group, said at the launch of its latest smartphone offering, the Ascend P6, in London: "We are considering these sorts of acquisitions; maybe the combination has some synergies but depends on the willingness of Nokia."

"We are open minded," Yu told reporters.

Nokia would have to be a willing participant in a buyout discussion, but its remains mum on whether or not its even in discussions with Huawei, or any other company for that matter. A Nokia spokesperson said the company "does not comment on market speculation."

Or, should Huawei consider a hostile takeover, it could bypass the need for the Chinese phone maker to deal with the pesky problem of Nokia's stubborn management. Nokia shareholders are getting twitchy over the company's Windows Phone strategy — ergo, it's entire strategy moving forward. If Huawei goes straight to Nokia shareholders, they could take the offer and run while the Finnish phone maker is still afloat.

Currently, Huawei has a burgeoning base of users in China, taking the third slot in the Chinese volume shipment space behind Samsung and Apple, but it wants to move away from feature phones into the smartphone space. And no better candidate than ailing smartphone maker Nokia, which has its range of high-quality Lumia smartphones that just aren't selling as well as they could be.

Based on comments to the London-based publication, Yu hinted that should Nokia succumb to a buyout deal, Huawei might ditch Windows Phone altogether in favor of "free" Android.

It comes after at least a year of speculation on who might buy Nokia. From Intel to Microsoft, even Lenovo at one point, based on comments made by Nokia chief executive Stephen Elop that he is sticking to his guns, at least with its Windows Phone strategy. Whether or not that extends to being bailed out by another company remains unclear.

Shares in Nokia ($NOK) rose by as much as 11 percent on the news, according to Barrons.

BlackBerry ($BBRY) was also up by 4 percent on the news, considering the firm has yet to pick itself up from the floor of the boxing ring, after having ten bells kicked out of it by the rival smartphone market, and could also be a suitable acquisition target for Huawei.

We've put in questions to Huawei but did not hear back at the time of writing.

Topic: Nokia

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30 comments
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  • that would suck big time.

    I don't like huawei... Another company that makes money by selling crap. They might sell more than Nokia, but Nokia is miles ahead in terms of quality.
    Emmanuel Fransson
    • shoot the messenger

      Judging by the rather sad standard Zack has set in his other posts, Nokia and MS have little need to feel concern.
      donaldvc
    • Huawei wants a company like Nokia which is already in the US market

      Huawei is a company pretty much "banned" from bidding on US assets, due to security concerns and their ties to the Chinese government/military.

      I imagine they see Nokia as a company they could "possibly" acquire due to their current financial position, with the hopes that the US would allow it to continue to sell their product in the US by sneaking though the backdoor of the telecommunications infrastructure.

      Throwing a customized Android distro on the phones would allow Huawei to install their own eavesdropping software on the phones, if they desired.
      William Farrel
      • Re:eavesdropping software

        "Throwing a customized Android distro on the phones would allow Huawei to install their own eavesdropping software on the phones, if they desired."

        You mean, to replace the officially sanctioned WP eavesdropping software?
        Might be, the feds won't let this happen and instruct some US company to buy Nokia.
        danbi
        • Why is it always the spin with you?

          On one day you claim “Android is the best because it lets you customize the code to any level you want, while Apple and MS say ‘here’s our totally locked OS” like it's a bad thing. When that openess could be used against phone users it's suddenly a non issue, and MS is really the bad guy in it all.

          So when a scenario comes up where the attributes of Android could be used a certain way to the Chinese’s advantage, your answer is to make excuses, and try to deflect criticism towards Microsoft, or anyone commenting on MS.

          So you’re saying what I proposed is an impossibility? I neither championed, nor said anything derogative about either OS, yet to you it’s “spin time”!

          Are you sure your tin-foil hat is on straight?
          William Farrel
  • Nope, not gonna happen

    Microsoft would buy Nokia outright, for cash, to prevent it from ditching WP. As they should. MS is on the brink of putting a truly common rich programming stack across all Windows/WP devices from servers to phones in the hands of developers. One development platform to rule them all, if you will. It would be the height of foolishness on their part to allow that strategy to slip through their hands just as it is about to be achieved.

    Of course, that's exactly what they did with Silverlight. Hopefully, they've learned from that debacle.

    Oh, and as I understand it, WP is the fastest growing phone platform by percentage at the moment.
    Sir Name
    • yes it is the fastest at

      The moment, but if huawei comes in and moves focus to android... MS will lose 80% of its smartphone sales. It would be a the end of WP IMO. So MS better, up and open their wallet.
      Emmanuel Fransson
      • better hurry up*

        .
        Emmanuel Fransson
      • With the money invested in Nokia, I'm sure that MS has

        the right of first refusal
        William Farrel
        • Legal Agreements

          I'm sure MS has legal agreements with Nokia to keep selling Windows phones into the future. I'm sure Huawei couldn't come in and discard them.

          It is becoming so old the way pundits like to put down MS and its ecosystem. For instance, if you go to gadget web sites like the Verge, it largely praise the Lumia 925 in its review of the smartphone, but then makes swipes at the Windows Phone OS and WP ecosystem, suggesting that these things are holding back the device. Of course you will never hear the Verge or pundits bad mouth the Mac OS and Mac ecosystem, even though the Mac OS device, software, services, etc. support are abysmal compared to the PC ecosystem.

          The fact of the matter is that Windows / Nokia Lumia phones are the fastest growing smartphones on the market, and it is such a pain having put up with pundits trying to put negative spins on the states of MS partners.
          P. Douglas
          • MS phone year

            Has not come the , yet? ... I comment about this a year ago and I have been fun for 12 months ... we'll see the next few months (but the picture looks ugly, MS)
            Marco nn
          • Sure you did.

            Why has it been "fun" for 12 months? You don't want people to have the chance to get a fine phone with a fine OS on it?

            Or would you rather Huawei just turn Nokia into "NokiaChineseEavesdrop Company"?
            William Farrel
          • omg

            "Or would you rather Huawei just turn Nokia into "NokiaChineseEavesdrop Company"?"

            It's OK the US Govt do more spying than anyone else

            I see a hostile takeover of Nokia on the cards.......but he is right about one thing WP *IS* weak, it's the sick puppy of the mobile world.
            DejaVu2
  • @Sir Name -- We should acknowledge...

    that when your market share is small, it is much easier to show large percentage gains based upon a smaller installed population. All the Microsoft/Nokia nay-sayers will never give any ground until there are substantial unit sales numbers compared to Apple and Samsung unit volumes.

    As a WP8 user, I am an enthusiastic supporter and advocate for the platform, but let's speak of its success in objective terms, and not succumb to using language that WP8 critics can easily pick apart to throw cold water on any and all encouraging news.
    DrTechnical.db
    • agreed

      Company A: 1 + 1 = 2 > 100% growth
      Company B: 10+2 = 12 > 20% growth

      i'd much rather be in company B's shoes
      ukjb
      • Depends on the rest of the equation:

        Company A: Profits from 0.2 to 0.4 -> 100% Profit growth.
        Company B: Profits from 0.2 to 0.15 -> 25% Profit shrinkage.

        I don't know if MS or Nokia are starting to make any real money yet but Huawei has been showing decent profits the last 6 quarters so they might be looking to strengthen their offerings a bit.

        I hope Nokia stays independent though the odds are against them given the typical time from a handset maker posting a loss and them either leaving the industry or being acquired. I think the record is 18 quarters for Motorola. DuckDuckGo (avoid the whole NSA thing) "Unforgiven: The consequences of profit failure in mobile phones"

        Good write up.
        Bruizer
        • when you think about it

          Every OS was "underground" before. I remember when i bought my first Android... Symbian and iOS users were making fun of my choice... And look where android is today. I mean... They've come a long way and I'm sure MS can achieve that with WP.
          Emmanuel Fransson
          • This is not about OSes

            It is about brands. Once you damage your brand, you continue to fail.

            Your Android phone was just unknown at the time, like if you buy today an Firefox OS phone. In near future Firefox OS might overtake Android, but it might not.

            Microsoft's problem with WP is that they named it too "Windows" and when it fails, that would damage the "Windows" brand further -- until nobody wants it anymore in either desktop or servers...
            danbi
    • re:

      That's why I qualified the statement with by percentage. I think it has shown both the largest percentage increase in sales and the largest percentage gain market share. I could be wrong or out of date though. The real point is that there's no way MS is going to let some Chinese company come in and buy Nokia to ditch WP for Android.
      Sir Name
      • that's not the point...

        it doesnt matter what the percentage growth is in ANY category... percentage growth is not a great way to compare two different things that aren't growing at the same rates.... two companies could both be growing at 5% per month, but if one is smaller than the other, they are growing faster... percentages is a good estimation of late growth, not early growth, and its a terrible comparison tool
        ukjb