A leading cellular analyst firm said that Microsoft (MSFT) is one of the favorites for buying a networking and cellular company, Nokia (NOK).
The predictions of CCS Insight in 2021, which both Microsoft as well as Intel listed as possible buyers, state that Nokia will be bought by one of the major American technology firms next year.
Of course, the history of Microsoft and Nokia has been there since 2013 which Microsoft paid over $7 trillion in an unfortunate attempt to provide a third option to Windows Phone iPhone and Android devices for the Nokia Handset Market. With the assets gained by Nokia written down in 2015, it suffered miserably and resulted in thousands of job losses.
While Nokia has since entered the cellular business (through HMD Global Oy, the exclusive licensee), the arm of the enterprise is not that attractive to potential purchasers. The US government has instead prohibited the US telecom suppliers from using equipment supplied by Chinese suppliers like Huawei. According to the American giants, it is Nokia’s networking arm.
Last week, Nokia signed a deal to become the UK’s biggest supplier of equipment, BT. According to CCS Insight ‘s customer and communication manager, Kester Mann, this won’t draw attention from the other side of the Atlantic.
“We feel that Nokia could be slightly vulnerable to an acquisition, Microsoft has taken a real interest in the telecoms space. Already we’ve seen two acquisitions by them this year (Metaswitch and Affirmed Networks) which is all about getting some expertise in the 5G and telco space and some contacts within industry. We believe Nokia could be a potential target for someone like Microsoft.”Kester Mann, Author at CCS Insight
The implications on Chinese suppliers would make it more competitive for Microsoft and other US companies to acquire the Finnish business. “It’s clear that the U.S. are on the lookout for alternatives to Huawei, there’s been a lot of concern about that. Potentially Nokia could be that opportunity.”
If Microsoft were to show an interest in Nokia, it would face competition from its old ally Intel, which is also focusing heavily on the 5G space, according to Mann. “Intel is a company to watch in the telco space over the next few years,” he said.
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