This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Nokia and Microsoft: The Tables Have Turned

On the other hand, Microsoft doesn't want to acquire Nokia. Buying a large European company such as Nokia could be a huge nightmare. Thousands of people may need to be fired, unions would have to be negotiated, the government of Finland could declare war on the city of Seattle, or worse. The whole thing could be a mess dominated with endless EU bureaucrats, lawyers and strife.

This is why Microsoft has never denied the suggestion that it will make its own smartphone. One year ago, Microsoft stunned the world when it announced it was building its own PC -- the Surface. If you don't believe Microsoft is hard at work engineering its own phone, you're most likely naive.

Think about it from Microsoft's perspective: Everyone but Nokia has effectively abandoned Windows Phone. If Nokia shifts direction to Android or something else, or if Nokia gets acquired by someone with similar thoughts, Windows Phone is over. Good-night!

That is, unless you as Microsoft do what Apple and BlackBerry do -- and for that matter Google (GOOG) now too, effectively -- and go vertical: make your own line of phones. Surface PCs; Surface smartphones -- who cares?

Microsoft's other option: BlackBerry Windows Phone and BlackBerry now each have around 3% to 5% of the smartphone market, far behind Android (70%) and Apple's iOS (21%). It's almost inevitable that these two forces -- BlackBerry and Windows Phone -- must merge in order to have a viable Number 3 player in the portable computing market.

In other words, BlackBerry must join either of two camps: Microsoft or Nokia. Alternatively, there would have to be a friendly "let's join together all three of us" event, which seems almost impossibly difficult to work out given valuations, politics, unions and worse.

I have no idea what will actually happen here. But something MUST happen. The current situation, where Nokia is 80% (and rising) of Microsoft's Windows Phone sales, is not sustainable. Each party is in a prisoner's dilemma, looking to turn the other party in. And both parties combined, even in a happy scenario, is a 3% to 5% market share player with an unsustainable position against Google and Apple (AAPL).

3 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,030.05 +50.92 0.30%
S&P 500 1,987.68 +1.17 0.06%
NASDAQ 4,515.8960 -10.5860 -0.23%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs