Friday, June 10, 2011

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Does the Samsung-Nokia takeover rumor seem sensible?

Nokia isn't any stranger to purchase rumors, and also the latest has got the company becoming bought out by Samsung. The handset manufacturer is experiencing pressure as new companies are usurping its hold over cheap phone production - the brand new York Time says companies like ZTE and Micromax are seriously difficult Nokia profits. Amid the businesses many public financial issues is really a new report in the Wall Street Journal saying Samsung is interested in purchasing the company - a claim Samsung and Nokia have both declined to discuss. “It seems like an industry rumor and that we don’t discuss rumors,” a spokesman for Samsung says.

a week ago, Nokia asserted rumors it had been being acquired by Microsoft were “100-percent baseless.” The attention did drive its fill up however, a boost the struggling Nokia likely enjoyed. So is this just another round of stock-boosting rumors or potentially an offer within the making?
Why it doesn’t make sense
It seems suspect that Samsung,
a brandname that has successfully aligned itself with Android, would want to acquire the floundering Nokia. Samsung is poised to defend myself against Apple as Android continues to grow its brand and improve its market position. Its Android handsets - especially the Samsung galaxy s series - are easily probably the most well-rated and popular on the market, and it’s prepared to debut more. The Galaxy tab lineup, while it’s experienced bumps in the road, has easily been probably the most capable iPad competitor to date. Even though it’s most likely not something Samsung would consider, it's some major issues with WP7 updates (although it should be mentioned that’s unsurprising for Samsung handsets, which have become notorious for OS upgrade roadblocks).
Another reason
to be suspect is the recent Microsoft takeover rumors. It’s no secret that acquisition rumors occasionally have positive effects on company stock, since it did for Nokia recently. This may be nothing more than baseless person to person spread using the sole intention to give Nokia a little boost.

it seems sensible
Disclaimer: We’re leaning toward the “doesn’t make sense” side, but
want to play devil’s recommend here. The only cause this deal could possibly make sense is if Samsung has an interest in establishing itself not just as a top Android provider but the top Windows Phone 7 provider too. A current IDC statement said that Samsung WP7 phones were “gaining traction” and also mentioned the manufacturer’s “multiple operating-system strategy” could have been a factor in the huge year: It had the biggest year-over-year net profit out of Apple, RIM, HTC, and Nokia.
And while
Nokia’s various internal issues really are a reason Samsung may steer clear, they might also imply the opposite: Nokia has been sounding pretty desperate, and this may be prepared to target Samsung for a lot less than we’d expect. The company recently was forced to lower its projected outlook throughout the year, furthering explaining it expected second quarter sales to “be substantially below” expectations. Its most recent earnings call fell just short of depressing and shook investor confidence: Nokia went as far as to say it won’t be setting annual targets for the moment.
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