standard Analysts: Nokia Might reconsider Alcatel Acquisition to Re-Enter Mobile Industry

Alcatel-Lucent

Last year there were some talks between Nokia and French telecoms and mobile company “Alcatel Lucent; at the height of the rumors it was said that Nokia was considering buying out Alcatel’s wireless division of networks (to merge with NSN). Now it seems analysts have reconsidered the deal as a true possibility now that Nokia have done off with their devices and services division, as a way to fill the gaps left behind by the sale. Nokia’s new CEO Rajeev Suri went on record saying that Nokia might consider some small acquisitions to fill these gaps, and some people think Alcatel might be the solution.

Alcatel_One_Touch_Evolve_33986_Unlocked_03

Alcatel have a number of Android devices on the market, such as the OneTouch (seen above); however they’re more popular in Asia than North America, but the real question is would Nokia want to re-enter the mobile business? Especially since the Devices sector of Nokia was the only division that wasn’t making any profits (when compared to NSN and HERE). The other factor is the deal Nokia made with Microsoft that stopped them from creating any mobile devices with the Nokia name for the next 5 years; however would acquiring Alcatel as a subsidiary be a work around for that? Or perhaps Microsoft would let it slide if they committed to make WP devices?

Either way this is just one analysts take on the Nokia situation, and it is largely dependant on how Alcatel’s performance shapes up; as they’ve been constantly loosing money for a while now, and have already started with the round of layoffs. But one can hope and dream right?

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About the Author

Ali is a dental school graduate currently living in Amman, Jordan; born and raised in the US, a tech lover with a serious addiction to all things sweet. He is the co-founder of GeekOnGadgets, and a senior editor at our Sister site MyNokiaBlog.com.

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  • chris rock

    Alcatel uhmmm?, well I don’t think so, on the other hand I wonder how cellphones will look like in 2020 when Nokia can re-join the business.

  • Pro

    ATTENTION THIS ARTICLE IS BS! DONT BELIEVE IN THIS!!!

    You are a bunch of noobs, Alcatel phones are not made by Alcatel-Lucent, Alcatel-Lucent sold their phone business to a chinese company, TCL. Alcatel history is very similar to the Nokia history (and Motorola, and Siemens and Ericcson)

    Do more research before spreading this lies.

    Noobs

    With just a fast search on Google:

    “Alcatel Mobile Phones are a brand of mobile handsets. It was established in 2004 as a joint venture between Alcatel-Lucent of France and TCL Communication of China.
    (…)
    Alcatel-Lucent later sold its shares in TCL and is no longer related to the Alcatel Mobile Phones brand”
    http://en.wikipedia.org/wiki/Alcatel_Mobile_Phones

  • GogoGodzilla

    Joining the mobile device game again is a terrible idea. Nokia needs to focus on their profitable businesses. Not make a bunch of fanboys salivate that want an Android device, but will still only buy a Samsung. It’s a terrible idea, and honestly, any analyst that suggest it has no foresight.

  • asd

    Sorry, this is a long comment.

    Yes, Alcatel doesn’t make Alcatel phones anymore, which I think will make it more interesting for Nokia. This still brings up two interesting points, 1. would they want to buy L-A and 2. would they want to get back to phone business in near future.

    1. L-A is in similar situation as NSN was a few years ago, before Suri became the CEO. Now Suri knows how to turn a network company around. I’m sure he also has a pretty good picture of what he wants the Networks to be. If my memory serves me well, he shed some parts of the old NSN and bought new ones when he was put in charge. If L-A has parts that he thinks could benefit Nokia and he has a plan about where to sell the rest, he could very well go for the deal. To know if this is the case one would have to have a closer look at the parts that L-A has and what Suri focused NSN on and I haven’t done this so I won’t guess if he is planning this.
    Another interesting point is that L-A owns Bell Laboratories, and them being a Nokia Research Center would be good for Nokia’s image and possibly R&D. They have a good reputation that at least has been based on real innovations. If Nokia is willing to fund them and let them play I’m sure they still could be as productive as before, a bit in the same way as the engineers in Salo that one day few decades ago started to play with RC planes.

    2. There are many reasons for and against this. Here’s a few that come to mind.
    + A good side would be that for the researchers, own phone manufacturing would offer real goals to focus on.
    + Networks and mobile devices have some synergy. Some of the tech knowhow can be used on both sides.

    – They just got out of this after being burned and even if they wanted to get back in, they and their stock holders might need a resting period before attempting to come back.
    – Most of the benefits can be achieved to an extent also with HERE devices, so there is no such need for phones.
    – Making high end phones requires a lot that’s bought or licensed from outside and in phones the selling point tech that differentiates the phone isn’t usually licensed under RAND terms. At this point they would probably even have to license some of their old own tech back from MS. In networks tech is more about standard compliance and standards presumably are under RAND. What ever comes out of Network and HERE R&D that can be used in phones, can be safely licensed out and they still would make some money from the phone market.

    I think that if Nokia wants to reinvent themselves as R&D powerhouse, which I think they should go for, laying off the phone market for the next decade is a good choice. Bying L-A, if it fits Suri’s vision of Networks, could also be a good thing. They should keep an eye on the phone market and do some R&D related to it, but not attempt to build their own devices or their brand there. If they want to keep the brand alive on the low end they could just try to license it to someone else if MS doesn’t use it.

  • efektos

    What good will it do? Nokia can’t just go back and do the great phones they used to do – because of the simple fact they can’t use their patents anymore (IIRC, MS bought the right to use most, if not all, of Nokia’s patents).

    • mirco

      You are right and wrong at the same time. You are right that Nokia won’t build any phones anymore. They sold their business with all the people and their expertise not just to re-enter it some time after. It simply wouldn’t make sense at all.

      However, you are wrong about the patents. They belong to Nokia but are licensed to Microsoft.

  • viipottaja

    Heh, how do you jump from “filling some gaps” to Nokia starting to make phones again? :)