Let’s think out of the box. Apple is sitting on about $100-billion in cash. The company’s revenue and profits are growing at an astounding rate. In recent years Apple has spent more money acquiring patents than on research and development. After all, compared to smartphone, computer, or tablet competitors, Apple doesn’t have many products.
What Apple has are plenty of lawsuits, both offensive and defensive. The company has spent billions already on patents to protect the newly forged iPhone and iPad money machine, so what’s a few billion more to a company that has $100-billion sitting around and not doing much but avoiding taxes and collecting minute amounts of interest?
What if Apple bought Nokia?
Tristan Louis posed the thought not as a question but as a statement. The implications of such a purchase are staggering, and could lead to a thermonuclear war in the technology industry.
What does Nokia have that Apple needs?
Smartphone manufacturing? Nope. Apple would be hard pressed to integrate Nokia’s culture into Cupertino. Engineers? Maybe a few. Nokia is shedding them in droves. Nokia has only two things that Apple needs.
Patents and maps.
The number of patents in Nokia’s portfolio is probably worth more than the company is worth as a cell phone manufacturer. How many patents? Reportedly, 16,000 telecommunication patents in the U.S., and perhaps as many as 20,000 additional patents worldwide.
Nokia spent $8-billion to buy map maker Navteq five years ago. That acquisition gave Nokia maps that put Apple’s to shame, and make up part of the data used in Google Maps. Google’s Eric Schmidt would have a cow on live TV if Apple were to acquire Nokia and strip Google of the all important mapping data.
Do you know who else would join Schmidt on TV and deliver a cow of his own (probably simultaneously)? Microsoft CEO Steve Ballmer. Microsoft is deeply in bed with Nokia and relies upon the beleaguered smart phone maker to churn out highly touted Windows Phones.
That wouldn’t happen if Apple bought Nokia. What would happen is thermonuclear war among tech giants Apple, Microsoft, Google, and Samsung. Prior to the war, the bidding for Nokia would drive the price beyond the current measly $10-billion value in the stock market. Microsoft would suffer yet another blow to their hopes of regaining prominence in mobile devices.
In a bidding war, Apple would either win Nokia’s treasures or drive Microsoft, Google, or Samsung (RIM is not a player) to deplete cash reserves and load up on debt.
As interesting as that war would appear to be, here’s what I expect to happen. The major players will sue for peace, reach agreements on basic patents which allow all players to compete in the marketplace, while sharing patents and royalties. If Google can afford Motorola then why shouldn’t Microsoft buy struggling Nokia? It could happen.
It may be a boring end to the what if scenario of thermonuclear war, but it’s more pragmatic.
Oh, one more thing. I’m convinced Apple’s iPad mini Will Reign As King Of Earth’s Tablet World (but needs a name change). A so-called iPad mini means the 10-inch model is a MaxiPad. Uh oh.
nikkk says
Tuesday, October 9, 2012 at 4:57 pm– Windows Phone is not something Apple is interested in – who cares? Nobody.
– Maps – that’s hot – $8Bn worth back then, probably still as much now.
– Patents – probably worth a few $Bn.
The biggest issue would be what to do with Nokia, the company. Apple can hardly buy then and then fire everybody, from the CEO down. Apple doesn’t need any of the people, or the products, or any of that – Nokia’s work force, products and general weight would be a ball and chain to Apple – classic case of negative equity there.
So Apple would have to buy them, take the patents and maps, then turn around and re-sell them or make them into a separate company with the rest of the assets – the manufacturing, phone design, phone engineering, et cetera. Kind of like google did with Motorola.
If Larry Ellison was running Apple, they’d go for the jugular right now. But with Tim Cook, I don’t think they have it in him, and in reality dealing with the rest of Nokia is a nightmare you wouldn’t wish on anyone, a huge distraction…
A bidding war where Microsoft can’t afford to lose and buys Nokia for an inflated price – that would be something Google would do. Apple – not sure.
Interesting times!
Franz says
Tuesday, October 9, 2012 at 5:51 pmYou have to think on the next steps.
What would Apple do with Nokia ? Cut out maps dept and patents. How to continue ?
What are they supposed to do wit the rest ? Currently Nokia has more than 100.000 employees all with families and hope for a better future.
It would be extremely bad for Apples reputation to close down all the rest.
Nah they are able to improve maps on their own. You could build 1000 street view like cars and collect your own data, would cost less than 10 billion $.