re: Nokia Numbers Show Microsoft’s Mobile Madness
Those are terrible ideas! I've seen them elsewhere in posts by people, but they lack the business sense that would hopefully, for Microsoft's sake, make them a good idea.
Nokia is a hardware company. Mostly, it's a consumer phone hardware company. Its networking division is also doing terribly. Microsoft, except for the minuscule sales of its entertainment and devices division, is a software company. Nokia is losing both money and sales. Nevertheless, it's still almost as large as Microsoft is. But if Microsoft buys Nokia, it will be stuck with most all of Nokia's phone sales being cheap feature phones and basic phones.
Like Apple, Microsoft has no interest in those. They would also have to divest themselves of Nokia's failing network business which Nokia hasn't been able to shop around. Despite the poor business Nokia is in, a puchase by Microsoft would require a premium to Nokia's stock price, meaning that Microsoft might have to caugh up as much as $26 billion.
The problem is that Nokia is shrinking, and is losing money. Microsoft would have to take a very large hit to their margins, and how long would it take to integrate the two? Microsoft's stock would take a dive.
There would be no guarantee that their phones would sell after all that, and what would Microsoft do with the three quarters of Nokia's phone sales that aren't smartphones, and can't run WP7 at all? If they divested themselves of most of the company, they would have to write down most of the purchase price.
This is a terrible idea.
So is the idea of buying Sprint. If Microsoft did that, they would be pariahs to the other cell carriers, especially AT&T, their largest carrier, and one that has been pushing Wp7 phones very heavily. All of the other concerns mentioned for Nokia about financial risks would apply.