Now that Nokia Corporation (ADR) (NYSE:NOK) has sold its device business to Microsoft Corporation (NASDAQ:MSFT), many are beginning to wonder what this means to both companies. For the sake of this piece, we are going to take a strong look at Nokia and what the future holds.
It is easy to see what MSFT is trying to accomplish with this acquisition. However, it is a bit more confusing to get a grasp on how NOK is going to be impacted moving forward.
According to a report published by Strategy Analytics, Nokia’s Solutions and Networks (NSN) – formerly known as Nokia Siemens Networks – will now be responsible for roughly 90 percent of the company’s revenue.
What will Nokia Corporation (ADR) (NYSE:NOK) do Now?
With the $10 billion in cash from the deal with Microsoft, Nokia is in position to focus on NSN growth and acquisition – and that is exactly what we should expect from the company in the following months.
The Strategy Analytics study goes on to discuss the possibilities for Nokia, including growth in the following areas: Cloud Based Voice and IMS services, Software Defined Networking (SDN), and Radio Access Networks (RAN).
No matter how you look at it, Nokia Corporation (ADR) (NYSE:NOK) as it use to be is no longer. The company will have to shift its focus, ensuring that it remains on the right path despite the recent changes.
Guang Yang, Senior Analyst for Strategy Analytics feels that “NSN might do well to consider using some of Microsoft’s money to enhance its RAN offering by acquiring one of the emerging Self Organizing Network (SON) vendors or expand its SDN focus.
While future growth is surely on the Nokia’s mind, doing so through acquisition may be its best bet.
As Sue Rudd, Director Service Provider Analysis added, NSN has a major weakness in its lack of IP software routing and gateway expertise. For this reason, an acquisition in this area, or even a partnership , could go a long way.
If you are a Nokia Corporation (ADR) (NYSE:NOK) investor like manager Ken Griffin, or even a Microsoft Corporation (NASDAQ:MSFT) investor like fund manager Jeffrey Ubben, you will want to keep an eye on the impact of the recent deal between the two tech giants.