Microsoft to buy out Nokia

A takeover of the world's biggest phone maker is becoming more likely with each passing quarter. In brief, the company saw a 32 percent loss in Smartphone sales, and a 41 percent drop in profits. Rumours about a possible Microsoft takeover of Nokia were swiftly dismissed by Stephen Elop, the Finnish phone maker's Chief Executive, who earlier called Richard Green to take over and draw future course of action for the dwindling Nokia market. But Richard Green too has taken a leave of absence, which may be extended indefinitely. Nokia's dominance at the lower end of the handset market is under threat, as younger rivals like China's ZTE launch much cheaper alternatives. South Korea's Samsung is now on course to overtake Nokia and become the world's biggest overall supplier in the next few weeks. Now there are organizations interested to take over an ailing Nokia. Some of Asia's fast-growing manufacturers might see Nokia as a ball and chain. For those focused on the higher end of the market, like Microsoft, a large part of Nokia's business might be seen as excess fat. Based on Nokia's current market capitalization of US$22bn, a takeover could also represent a big financial burden for many prospective buyers. The attractions in Nokia are controls about a quarter of the global mobile-phone market. Finally, a price tag of around US$22bn does not look such a hefty outlay when seen in the context of the US$8.5bn Microsoft recently paid for internet-telephony pioneer Skype, a company that has still not come up with a convincing business model. Nokia's balance sheet is also still "highly liquid", according to Barclays Capital, with net cash of US$5.65bn at the end of last quarter. ‘Microsoft is looking to purchase Nokia's mobile phone business.’ Those whispers intensified after a well-placed insider claimed the deal has already been struck. However, Nokia denied the report. Eldar Murtazin, whose track record at predicting monumental changes over at Nokia is pretty good, reported that the deal is apparently sealed. "One small software company decided last week that they could spend 19 bin USD to buy a part of small phone vendor," he said. "That's it." If Microsoft purchased Nokia's handset business, it would immediately put a wedge between itself and its WP7 OEM partners, HTC, LG, Dell, and Samsung--all of which have taken a risk to make and distribute WP7 smartphones.