Nokia Corporation (ADR) (NYSE:NOK) had quite a productive day on the market Tuesday, as the stock of the Finnish mobile handset maker jumped to more than $4 a share at one point during the day following a report that stemmed from a quote by an executive at Chinese handset manufacturer Huawei that hinted at the possibility of Huawei making an acquisition play for Nokia, which has struggled to remain competitive in the mobile phone market in recent years after being the dominant handset around the world as recently as 2006.
During the trading day, Nokia Corporation (ADR) (NYSE:NOK) spiked nearly 12 percent at one point at about $4.12 a share after the Financial Times quoted a Huawei executive as his company being “open-minded” to a possible Nokia acquisition. “We are considering these sorts of acquisitions; maybe the combination has some synergies but depends on the willingness of Nokia. We are open-minded,” Huawei’s head of consumer business, Richard Wu, was quoted as saying.
Nokia Corporation (ADR) (NYSE:NOK) acquisition talk is nothing new, as Huawei has been mentioned in past rumors, but also Microsoft Corporation (NASDAQ:MSFT) – which currently has an alliance with Nokia to produce handsets for its Windows Phone operating system. As Nokia seems to continue to struggle to get traction in the smartphone market dominated by Apple Inc. (NASDAQ:AAPL) and Samsung Electronics Co. Ltd., the talk of Nokia being snapped up persisted early after Nokia began rolling out its stable of Lumia handsets. But lately the talk had died down as it seemed that the Lumia handsets, and Windows Phone in general, seemed to gaining some momentum in the marketplace.
But the rumor was finally squelched – for now – by Huawei vice president for external affairs, Bill Plummer, who said that the company “has no plans to acquire Nokia.” While the talk is not dead, it seems to indicate that Huawei is in the market, but does not know if Nokia Corporation (ADR) (NYSE:NOK) is putting itself on the market. With a couple more devices planned to launch in the coming months, whether Nokia will be willing to be bought may depend on how the Lumia handsets do this year. We wouldn’t expect much movement on the acquisition side in regards to Nokia perhaps until after the holiday shopping season. If Windows Phone continue to gain, and Nokia specifically, in the handset market, then the talk may die down because CEO Stephen Elop might just save his job with a decent sales performance the rest of this year.
Maybe this is what he meant when he said this winter that Nokia Corporation (ADR) (NYSE:NOK) was going to put out a “hero device” – the device that would save Nokia as an independent, publicly traded company. What do you think? Is Huawei a good candidate for this purchase? Do you think Microsoft Corporation (NASDAQ:MSFT) would make a play if and when Nokia is on the selling block? Give us your feedback in the comments section below.