Posted by Bonovox
File this under “Did they just say that?”
In an interview with the Financial Times, Richard Yu, chairman of Huawei's consumer business group, said that the company would be open to buying Nokia to boost their smartphone sales, especially in non-Asian markets where the Chinese OEM is still facing some challenges.
Cnet interprets some of Yu's comments as suggesting that if Huawei were to buy Nokia, Windows Phone itself may be up for reconsideration. The reason is price: Windows Phone still has a license fee, whereas Android is "free". We're not confident that Huawei would do such a thing, even if they were to buy Nokia, but it's clear they don't have much faith in the Microsoft OS either.
All of this is quite fascinating, especially since Huawei is expected to release the Ascend W2 in the coming weeks, sporting Windows Phone 8. But when Microsoft's partner is saying this publicly, it's not exactly a vote of confidence:
“Whether Windows Phone [will be] successful is difficult to say – it has a very small market share. [Windows Phones] are weak but still require a licence fee. That’s not good. Android is free.”
But is Nokia selling?
Of course this the free-market and companies can’t really just buy other companies unless they are willing to be sold. Well, pretty much. First off, we should note there is zero indication that Nokia is actually looking for a suitor to buy them. While occasional rumors pop up, they are always unfounded and currently there is just no evidence that Nokia wants to sell.
That’s a problem for the evidently boisterous Huawei, since if Nokia doesn’t want to sell, it complicates things. But there is such thing as a hostile takeover, in which Huawei can bypass Nokia’s management and go right to the investors with a direct offer for purchase. While very difficult to pull off, if the investors are unhappy with Nokia’s management they could opt for the Huawei deal—especially if Huawei throws a lot of money at them, which is often how such deals work.
Unfortunately, some of Nokia’s investors are upset and have even been quite vocal about it. It’s far from clear though that they are in a majority position of have any sway over the other investors, but if Nokia doesn’t start gaining significant market share, the people holding the money could get antsy.
Would Microsoft let it happen?
Here’s the thing: Huawei seems to be walking proudly, saying headline grabbing things like buying a company that is not up for sale and scrapping its main OS, but in reality we place little chance of this happening.
For one, we don’t think Finland, who plays a role in that company, would let a Chinese firm walk in and buy what is essentially one of that country’s prized possessions. That’s not to say they could ultimately prevent it from happening, just that things would get messy (especially once you bring in the EU into the mix).
Next up is Microsoft. While MSFT has no intention of buying Nokia—there’s just no value in doing so when they’re getting everything they want now—it doesn’t mean they would let their most cherished OEMs just fall into another OEM. Especially since Huawei hinted that they would then kill Windows Phone for Android, destroying whatever momentum Windows Phone 8 has built up in recent months.
Because of those reasons, we think Huawei is just talking. Heck, a lot of OEMs would pick up Nokia if they could—just their patent portfolio would be worth it, never mind their talented engineers and design teams. But there are quite a few insurmountable barriers, in our opinion, between Huawei’s dream and reality.
