4 reasons Apple should buy Nokia
The Finnish company's powerful maps and impressive patent portfolio have tech insiders daydreaming of an industry-changing acquisition.
Nokia (NOK) has seen better days. The Finnish phone maker continues to struggle to gain traction in a marketplace dominated by Apple (AAPL) and Android (GOOG). Its new flagship device, the Windows-powered Lumia 920, failed to impress investors when it was announced last month, subsequently causing the company's stock to dive.
Now technology blogger and entrepreneur Tristan Louis argues that Apple ought to acquire the once-prolific phone manufacturer -- even though Tim Cook's company is the very competitor responsible for Nokia's litany of woes.
Here are four reasons Apple might want to dig into its deep pockets and buy Nokia:
1. Nokia has really powerful mapping technology
Apple Maps isn't very good, and as a result, Apple has been feeling the heat from a critical tech press and an even more critical public. Nokia, on the other hand, has been doing maps "for a long time now, and they have access to even more data than Google," says Buster Heine at Cult of Mac. According to Alexis Madrigal at The Atlantic, Google gets most of its mapping data from the 5 million miles driven by its Street View cars. But Nokia has a secret weapon: GPS data from FedEx and UPS trucks. UPS trucks drive 3.3 billion miles annually, giving Nokia a massive database. Simply put, says Cult of Mac's Heine: Nokia is "making great maps, they just can't make money off them, which makes them a great acquisition target for Apple."
2. Nokia has a treasure chest of patents
As Apple's recent smackdown of Samsung proves, the future of the mobile space "will be dictated by the availability and ownership of patents," says Tristan Louis on his blog. Nokia has "quietly built" a "very strong and relatively young" portfolio of almost 16,000 patents around telecommunications in the U.S. alone, which would arm Apple with an intimidating array of next-generation technology. Indeed, just Nokia's exhaustive portfolio of patents might be worth as much as $6 billion to $10 billion.
3. Nokia could help with TV
Whispers of a game-changing Apple TV, which in theory would sync with other iDevices, have long been ubiquitous in the tech world. But Nokia actually has "good technology for delivering live TV to wireless devices,"says Bruce Upbin at Forbes. If Apple truly wants to dominate the TV arena, it'll have to beam shows and movies to iPhones or iPads in real-time. That's a field Nokia has some expertise in.
4. Microsoft would be toast
Microsoft has a lot riding on the release of Windows Phone 8, and Nokia is its primary launch partner. Buying the Finnish hardware manufacturer would "knock Microsoft on its heels," says Forbes' Upbin. "Assuming there wouldn't be any antitrust claims leveled by Microsoft (and wouldn't that be ironic) Apple could squelch whatever progress Microsoft has struggled to secure in mobile." Indeed, says Tristan, if Apple were to acquire Nokia, it'd be "something pretty close to a deathblow" for the house that Gates built.
More from The Week
- Should Hewlett-Packard acquire BlackBerry?
- Apple's iPad Mini: 6 rumored features
- Did Apple actually win 'Mapgate'?
They have also manufactured hardware for the XBox.
If Microsoft can manufacture an XBox and a Surface tablet, they should be able to manufacture a smart phone, but the patents might make it problematic.
Apple and Microsoft bidding for Nokia would be really fun to watch. Let's see at $4-5 BV PS where would they start maybe $6? Form there all the way up to $8-10 PS or close to $40b market cap.
Why wouldn't Apple just license Nokia's mapping technology as they already have the smart phoen patents?
Copyright © 2014 Microsoft. All rights reserved.
VIDEO ON MSN MONEY
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.