Chief executive officer of Nokia Corp. has again ruled out possibilities that the company is looking forward to sell its smartphone business unit to Microsoft Corp., which allegedly wants to market its own mobile phones to drive its Windows Phone platform. Stephen Elop insists that the potential deal makes no sense as Nokia has a lot of synergies across all of its business division.
"As we have described it before, the rumors are baseless, and some people who seem to enjoy generating rumors are running out of fresh material, so it seems to have come up again. I have nothing else to say," said Stephen Elop, chief exec of Nokia, in an interview with PC Magazine.
The rumours about potential transaction between Microsoft and Nokia were inspired by a Russia-based blogger, who said last May that the software giant was about to purchase Nokia or "all of its interesting assets" and would prefer to close the deal before the end of 2011. Later on he reiterated claims that Microsoft was only interested in taking over Nokia smartphone division and not the company, which owns valuable network and telecommunication technologies-related patents, itself. Early this year the blogger said that Microsoft would buy Nokia's smartphone unit in the first half of 2012 as the talks are underway.
Nokia insists that its division will not be able to be competitive when separated as the company enjoys a lot of synergies across all of its product ranges. Basically speaking, those product groups will not be competitive once separated.
"There's significant synergies between the multiple groups within Nokia—for example, on decisions around chipsets, on memory, on different display technologies. We gain scale advantages across the entire portfolio of devices that we have. In a number of the services and areas where we differentiate, [for instance] location-based services, we have a common team that's doing that work collectively across mobile phones and smart devices, so there's a lot of synergy that exists across the portfolio of Nokia products," said Stephen Elop.
Obviously, there is no smoke without fire and Microsoft may be negotiating with Nokia about certain kind of transaction. However, it looks like the companies are not even close to make any kind of deal now. Microsoft barely needs Nokia's smartphone unit, which is on a path towards serious decline and which will lose a lot of cost-efficiency after separating from the mother company. Finally, Microsoft clearly understands that few people would like to get a Microsoft-branded smartphone, based on failures of Microsoft Kin, Microsoft Zune and some other mobile initiatives.