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The Nokia deal: What's Microsoft thinking?
Why has Microsoft agreed to buy Nokia's moible phone business for more than five billion euros? It's somewhat perplexing to Saxo Bank's Head of Equity Strategy, Peter Garnry. It's a great deal for the struggling Finish handset maker, he says. But he has real concerns about how good it will be for Microsoft, one of the world's leading technology players.
Nokia shares rose by around 45% on the open on Tuesday. Peter says it's also really good news for the company's bond holders as the company was hemorrhaging cash. However, Peter says Microsoft have paid a lot of money in this deal, which is due to be finalised next year. He says they're still not as good a hardware company as Samsung or Apple and he adds that nine out of ten acquisitions do not fulfill synergy expectations. He says it'll be very difficult for Microsoft to integrate Nokia into its business and move it foreward.
So where does this leave rival Blackberry, which is already struggling to compete on the smartphone market? Peter says the company should start focusing on what they are good; mobile security and increase shareholder value that way.
Nokia's phone business marks the exit of a 150-year-old company that once dominated the global cellphone market
01:32 minutes
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