Should an Android partnership develop, Microsoft might figure it’s better off buying Nokia rather than seeing it split allegiances. But remember that CEO Stephen Elop has already discussed Android licensing once before and in the end decided that the cost of partnering with Google was too high. Nothing has changed from those original negotiations.
Proponents of the takeover also fear another player could swoop in. In June, the Financial Times reported that China’s Huawei may be interested in using acquisitions to expand its mobile presence. Of course, Nokia Corporation (ADR) (NYSE:NOK) would be the first candidate on Huawei’s list but good luck getting such a deal past European regulators. Other players may decide to buy the Nokia’s crumbling handset business. Today, however, there’re no apparent suitors courting the company.
And if Microsoft were to acquire Nokia, it would be taking on a major headache. Microsoft would have to find a way to integrate the two businesses while simultaneously shedding thousands of employees. In addition, it would risk annoying other Windows manufacturers that might be unhappy about Microsoft making its own handsets.
Foolish bottom line
While the acquisition would secure Microsoft Corporation (NASDAQ:MSFT)’s strategic interests, those needs aren’t as pressing today as they were a year ago. So unless the price tag comes down, why buy Nokia’s cow when you can get the milk for free?
The article Why Microsoft Shouldn’t Buy Nokia originally appeared on Fool.com and is written by Robert Baillieul.
Robert Baillieul has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft.
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