There is a rumour doing the rounds that Korean tech giant Samsung is considering buying Nokia, and it has caused the Finnish mobile phone manufacturers share price to spike 11%.
The rumours, however, seem to be completely unfounded. Currently Samsung is the world’s largest phone manufacturer and Nokia sits in second place but its fortunes on decline since the advent of the smartphone – and combining them would create a company with a market share that would give monopoly concerns to even Jeremy Hunt MP. But even if the acquisition was passed by the watchdogs, it still would be a logistical nightmare and make no sense for either company.
Samsung already makes phones for every market and price-point from feature-phones to budget smartphones to industry leaders like the Galaxy S3. They already make phones running Android, Windows Phone 7 (Windows 8 in the near future), and its own Bada OS. Nokia has a few Symbian-based smartphones on the market, but most of its smartphones run Microsoft’s Windows Phone 7 – and they have a much more limited range of phones, all of them overlapping with Samsung’s offerings.
One reason given for the acquisition would be for Samsung to to have access to Nokia’s vast patent portfolio in its ongoing patent fights with Apple and Microsoft – but this would simply not be a sufficient reason to acquire the whole company. There are easier ways of acquiring patent portfolios, and Samsung could probably simply buy the patents from Nokia without taking on the issues of merging two very different companies from two very different countries.
If Samsung were in the market for another phone firm to add to their arsenal they could have acquired Palm before HP snapped them up and put most of the company out to pasture, and even now there would be more of a reason to acquire RIM, the maker of Blackberry smartphones that has fallen on tough times recently. A Nokia acquisition simply makes no sense whatsoever.