Microsoft is one of the favorites to buy networking and cell phone company, Nokia, according to a leading mobile analyst firm.
CCS Insight’s predictions for 2021 include the claim that Nokia will be bought by a major U.S. tech company next year, with both Microsoft and Intel named as likely buyers.
Microsoft and Nokia, of course, have history. In 2013, Microsoft paid over $7 billion for Nokia’s handset business in an ill-fated attempt to provide a third alternative to iPhone and Android handsets with Windows Phone. It failed miserably, with the purchased assets from Nokia written off in 2015, resulting in thousands of job losses.
Although Nokia has since re-entered the cell phone business, it’s not that arm of the business that would prove attractive to the potential buyers. Instead, it’s Nokia networking arm that would interest the American giants, according to CCS, with the U.S. government banning telecoms providers from using equipment from Chinese suppliers such as Huawei.
Nokia last week clinched a deal to become the largest equipment supplier to the U.K.’s biggest telecoms provider, BT. That won’t have failed to attract attention on the other side of the Atlantic, according to CCS Insight’s director of consumer and connectivity, Kester Mann.
“We feel that Nokia could be slightly vulnerable to an acquisition,” said Mann.
“Microsoft has taken a real interest in the telecoms space. Already we’ve seen two acquisitions by them this year [Metaswitch and Affirmed Networks]… which is all about getting some expertise in the 5G and telco space and some contacts within industry. We believe Nokia could be a potential target for someone like Microsoft.”
The backlash against Chinese suppliers would also make an acquisition of the Scandinavian firm more attractive to Microsoft and other U.S. firms. “It’s clear that the U.S. are on the lookout for alternatives to Huawei, there’s been a lot of concern about that. Potentially Nokia could be that opportunity.”
If Microsoft were to show an interest in Nokia, it would face competition from its old ally Intel, which is also focusing heavily on the 5G space, according to Mann. “Intel is a company to watch in the telco space over the next few years,” he said.