This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Microsoft Has Nokia's Hardware but Who Cares?

NEW YORK ( TheStreet) -- Suspicions were raised in July when Nokia (NOK - Get Report) announced a $2.22 billion (1.7 billion euro) offer to acquire the remaining portion it had not already owned of its joint venture with Siemens (SI) called Nokia Siemens Network (NSN).

Although I felt it was a great deal for Nokia, the timing raised many eyebrows. Given the fact that Nokia was then in cost-cutting mode, I felt this was an expensive deal.

Complicating matters, Nokia, which mortgaged its future with Microsoft's (MSFT - Get Report) Windows platform, wasn't gaining the sort of traction necessary against Apple's (AAPL) iOS and Google's (GOOG) dominant Android operating system -- at least not enough to produce the sort of cash flow needed to fund such an expensive acquisition.

On Monday, however, the pieces fell into place.

What probably shouldn't have come as a surprise certainly stunned investors after Microsoft announced that it was acquiring Nokia's mobile phone business, along with Nokia's strong patent estate, for 5.44 billion euros ($.7.2 billion). Raise your hand if you did not see this coming.

Strapped for cash, Nokia had no choice but to sell. We've been talking about it for months. But what are the near-term and long-term implications?

While this deal does offer Microsoft some assurances Nokia won't sell to the highest bidder -- Huawei and Lenovo (LNVGY) were reportedly interested -- I don't believe this necessarily changes anything for Microsoft. This smells like Google/Motorola all over again.

Seeing as how Google has struggled to find synergies in the Motorola acquisition after two years, I question Microsoft's ability to extract value from Nokia, especially now on the heels of CEO Steve Ballmer's planned retirement. As I've pointed out, both Nokia and Microsoft saw eroding market share at the hands of Apple and Samsung and felt they had to do something. Nokia has essentially bailed on the market. Microsoft, on the other hand, is digging in its heels.

This could be the first sign the company is finally ready to embrace the non-PC world. It can also be the first clue as to who is more suited to replace Ballmer. I believe Stephen Elop now makes just as much sense as any name thrown out there. But there's no doubt Microsoft has finally caught on to the advantages of having a unified system, the same "ecosystem" that you hear so much about with Apple products -- and to a lesser extent, those on the Android platform as well.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
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!
SYM TRADE IT LAST %CHG
MSFT $40.66 0.00%
NOK $7.58 0.00%
AAPL $124.43 0.00%
FB $82.22 0.00%
GOOG $548.00 0.00%

Markets

DOW 17,776.12 -200.19 -1.11%
S&P 500 2,067.89 -18.35 -0.88%
NASDAQ 4,900.8850 -46.5560 -0.94%

Partners Compare Online Brokers

Free Reports

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