Reason 3: Chairs will fly in Redmond
Microsoft CEO Steve Ballmer is likely to throw a few chairs if Apple acquires Nokia. The move would cripple Microsoft’s mobile operations immediately, since Nokia still produces 76% of all Windows phones.
Apple could then either continue producing Nokia Windows Phones, ironically using its rival’s technology to generate revenue, or discontinue it and replace its entire handset line with iOS technology.
When Google acquired Motorola, the former handset kingpin had almost no prospects for recovery. In contrast, Nokia isn’t down for the count yet. Although CEO Stephen Elop’s recovery efforts have been paying off, critics claim it may be too little, too late.
What Nokia needs most right now is cash, as evidenced by the cancellation of its dividend. An infusion of cash from Apple could be what it needs to increase the Lumia’s market share.
Reason 4: Apple Maps
Horrid memories of melting cities, dislocated cities, and railroad track driving routes still haunt the memories of Apple Maps users. That distorted mess was the company’s worst blunder in years, and forced it to allow Google Maps back onto iOS platforms.
Nokia surprisingly owns some of the best mapping software in the business, after it acquired Navteq in 2007. Google, Research In Motion Ltd (NASDAQ:BBRY), Microsoft, Amazon.com, Inc. (NASDAQ:AMZN), and Samsung all depend on Navteq technology to some degree. Acquiring Navteq would be a brilliant move that mirrors Google’s acquisition of travel search engine ITA back in 2011 – it would take control of its competitors by buying (and charging for) the back door.
Nokia also paid $8 billion for Navteq. Claiming that valuable piece of technology, along with the rest of Nokia for $15 billion to $20 billion, would be a steal.
The Foolish Bottom Line
For now, Nokia’s on sale. But under Elop’s ambitious guidance, it may not be a value stock for much longer. At most it would cost Apple $30 billion to acquire Nokia and cover its outstanding debt. That’s a mere 22% of its cash hoard to invest in a future beyond the confines of iOS devices. Acquiring Nokia would expand Apple’s defensive moat, destroy Microsoft’s mobile business, and give it valuable leverage over its Android-based competitors.
That, Mr. Cook, would be money well spent.
The article Four Reasons Why Apple Should Buy Nokia originally appeared on Fool.com and is written by Leo Sun.
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