Reports Suggest Microsoft Could Rescue Struggling Nokia
May 7, 2012

Reports Suggest Microsoft Could Rescue Struggling Nokia

The relationship between Microsoft and Nokia could lead the Washington-based tech giant to come to the Finnish cellphone maker's aid, should the latter's financial situation fail to improve, Victoria Howley of Reuters reported on Sunday.

Microsoft is the former employer of current Nokia CEO Stephen Elop, and also has ties to the company because "Nokia was its first major break into the smartphone market after a decade of heavy investment. During that period other cellphone makers either chose to use their own software -- as did Apple -- or favored Google Inc's Android." Howley reported.

Those connections have led to increased speculation that Microsoft may look to further their ties with Nokia, bailing out the Finnish phone producer while seeking to gain their own foothold in the industry.

Analysts told Reuters that they could definitely see Microsoft lending assistance to the company should Nokia's numbers fail to improve. Currently, Nokia receives $1 billion annually from Microsoft in exchange for the use of their software on Lumia smartphones, and while experts predict that it is unlikely that Microsoft will complete a full takeover of the Finnish firm, they may be likely to provide a loan or reach an equity stake agreement.

According to Hindustan Times reports, during the last quarter, Nokia officially lost their position as the worldwide leader in handset sales to Samsung. Citing information obtained from Strategy Analytics, the publication reported that Samsung held a 25.4% global market share in the last quarter, compared to 22.5% for Nokia and 9.5% for Apple.

Reuters also reports that Nokia is attempting to sell off its subsidiary Vertu, a British-based manufacturer and retailer of high-end, luxury mobile devices. However, unidentified sources told the news agency that a potential sale to private equity firm Permira would likely "generate only a few hundred million euros." The company is also said to be considering a sale of some of its intellectual property, which experts told Howley could well be "the best in the industry."