In a bid to further strengthen its smartphone and communication businesses, Microsoft Corp. reportedly wants to acquire Nokia Corp., the world's largest supplier of smartphones that recently decided to use Windows Phone operating system as the main OS for smartphones. The negotiations about the transaction will start next week, according to an analyst.

"Next week Nokia will begins talks with Microsoft in a bid to sell its phone division. While the results of these negotiations will not be public, the deal could be closed before the end of 2011 as both companies in a hurry. After all, today the main task for the current management of Nokia is not to produce good products, but to destroy the company as soon as possible and transfer interesting asses to Microsoft. Everything is transparent and takes place in public," said Eldar Murtazin, an analyst with Mobile-Review web-site.

The information is strictly unofficial at this point. Moreover, given the fact that Nokia's phones are not popular in the U.S., whereas Microsoft Windows Phone platform is not popular in Europe, practical feasibility of the deal is under a huge question mark.

Even though Microsoft has been developing operating systems for mobile phones for over a decade, its latest Windows Phone 7 operating system has failed to become popular among smartphone makers. Purchase of Nokia will help Microsoft to boost its presence on smartphones, but the company will not be able to gain control of 30% of the smartphone market that Nokia controls nowadays. It is also unlikely that Nokia will be able to boost its market share to historical levels.

While it may make sense for Microsoft to purchase Nokia, the latter does not need to be acquired since it will greatly reduce its abilities to compete on the market of high-volume mobile phones and thus will limit its growth. Even though Nokia has its amount of problems, it is still profitable and does not need funding from the world's largest software designer.

"We typically don’t comment on rumors. But we have to say that Eldar’s rumors are getting obviously less accurate with every passing moment," said Mark Squires, a spokesperson for Nokia.

Tags: Microsoft, Nokia, Business, Windows Phone