Shares in Nokia have increased after the latest reports linking it with a takeover by Microsoft.
According to Bloomberg, shares were up 4.1% after the Wall Street Journal revealed both companies made 'significant progress' in teaming up, although talks later hit an impasse. Nokia has wedded its future to Microsoft after choosing to drop its native Symbian OS for Windows Phone in 2011. Mikko Ervasti, analyst at Evli Bank Oyj, said: 'It does makes sense. All options have to be on the table, but at the moment it’s of utmost importance that operations are not distracted. This summer is Nokia’s chance to show Lumia is here to stay.'
In January, Nokia reported its first profit after almost two years of losses. It has lost market share to Apple and Samsung after failing to move quickly enough with the smartphone market. The Microsoft report is the second takeover rumour to hit Nokia this week, after Huawei's consumer business group CEO Richard Yu flirted with taking over the Finnish manufacturer.
Hannu Rauhala, an analyst at Pohjola Bank Oyj, was more cautious as to whether Microsoft needs to take over Nokia. He said: 'I don’t understand the reasons behind the deal. If Microsoft desires to make its own phones, there would be plenty of manufacturing capacity available on the market. Microsoft itself has expertise on operating systems and hardware expertise could be obtained from the market.'
Author: Graeme Neill