Wednesday, June 1, 2011

Russian analyst says Microsoft in talks to buy Nokia phone division

A lot of chatter is circulating about Microsoft possibly buying Nokia's mobile phone division this month, and it can all be traced back to an analyst working in Moscow.

Eldar Murtazin, an analyst at Mobile Research Group and editor of the website, said he believes the two companies are discussing a sale of Nokia's mobile phone division to Microsoft for $19 billion.

The two companies partnered in February to make Windows Phone the primary software for Nokia's smartphones in the future. Both are struggling to compete with Google Android software and Apple's iPhone.

Murtazin, who is based in Russia, has been right in the past on some rumors. He reported that Nokia would shut down its Ovi brand, which Nokia eventually did.

I spoke with Murtazin by phone when he first tweeted two weeks ago that Microsoft was talking to Nokia about buying Nokia's phone division.

"According to my source, which was correct in the past, it is the kind of deal that is coming this year," Murtazin said by phone. "They have a very short time frame for this deal because the main problem for Microsoft is that Elop will be on sale of company." His reference was to Stephen Elop, the Nokia chief executive who came to the company from Microsoft, where he was president of the Business division.

Murtazin declined to identify his sources, but he said they were reliable. In the past, he said Nokia, a Finnish company, asked Russian authorities to provide the identity of his source to the company.

"Nowadays Microsoft Windows Phone 7 is not comparable with iPhone due to one reason -- because iPhone was developed completely with Apple software and hardware," Murtazin said. "For Microsoft the paradigm will be to make a complete cycle" of hardware and software together.

On Tuesday, Murtazin tweeted again: " One small software company decided last week that they could spent 19 bln USD to buy a part of small phone vendor. Thats it."

Microsoft declined to comment on Wednesday.

Nokia declined comment earlier, and referred us to an earlier quote the company gave to Blooomberg: "We have to say that Eldar's rumors are getting obviously less accurate with every passing moment."

Nokia said Tuesday that it expects sales and profit margin to be significantly lower than expected, and that its first mobile phone running Windows will be ready in the fourth quarter this year.

Nokia's stock was trading up slightly Wednesday, at about $6.68 per share, after opening at $6.51. Microsoft stock opened at $24.99 per share and fell to $24.46 in intraday trading.

Update 11:10 a.m.:

Nokia CEO Stephen Elop called the rumor of an acquisition "baseless" in an interview with Bloomberg.

According to Wednesday's report from Bloomberg, Elop said he never discussed an acquisition with Microsoft.

?We have a great plan for our future, and we?re focused on executing that plan,? he told Bloomberg. "The rumors are all over the place. There?s no basis for them."

One small software company decided last week that they could spent 19 bln USD to buy a part of small phone vendor. Thats it.less than a minute ago via web Favorite Retweet Reply

Dominique Swain Jamie Chung Alicia Witt Radha Mitchell Melissa Rycroft

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