A marriage made in heaven
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
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.