If Huawei acquires Nokia, Windows Phone is doomed

Huawei’s Ascend P6 launch in London not only threw up a new device from the Chinese company, but also brought forward revelations that the company is mulling over a possible Nokia acquisition.

Richard Yu, chairman of the Chinese company’s consumer business group, told the Financial Times that Huawei would consider buying Nokia in its bid to become the world’s leading smartphone maker. "We are considering these sorts of acquisitions; maybe the combination has some synergies but depends on the willingness of Nokia. We are open-minded," Yu said.

A man looks at a Huawei mobile in Shanghai (photo credit: Reuters)

Huawei has big plans for its smartphone business (Image credit: Reuters)


Yu believes that the smartphone market will eventually consolidate with three or four big players. Huawei’s plan is to be one of those companies. Ominously, if Huawei ever does acquire Nokia, it would be bad news for Microsoft and its Windows Phone platform. Yu called the platform “weak”, even though Huawei does have one Windows Phone smartphone, the Ascend W1. “Whether Windows Phone (will be) successful is difficult to say – it has a very small market share. That’s not good. Android is free,” Yu said, hinting that any WP8 devices that Nokia may have planned could be relegated to the sidelines if the acquisition does go through.

Nokia is by far the biggest backer for Microsoft’s platform and the success of its Lumia range of smartphones is to an extent a direct indicator of the climb of Windows Phone. In a way, the relationship between Nokia and Microsoft is symbiotic and any change in the status quo could end up damaging Microsoft’s mobile business quite a lot. For its part, Nokia has remained steadfast with Windows Phone ever since the two came together over two years ago, with CEO Stephen Elop also telling shareholders there’s no Plan B for the company beyond Windows Phone.

Of course, any acquisition attempts by Huawei have to get the nod from Nokia’s board or its shareholders. While the former will be the tougher group to convince, the shareholders might just prove an easier nut to crack. Elop's staunch defence of the Windows Phone platform at the last meeting suggested that shareholders might be getting antsy. The Finnish company has not said that it is in talks with any companies about a possible acquisition. CNET quoted a Nokia spokesperson as saying that the company "does not comment on market speculation."

Huawei’s intentions of becoming a leading smartphone maker were made pretty clear by Yu at the launch for the Ascend P6, claimed to be the world’s thinnest smartphone. The company said it aims to ship 55-60 million smartphones this year. “Twenty years ago, we were nothing but now we have the best quality and our customers say we are the best. We want to shorten the gap with competitors. We want to lead,” Yu said.

Published Date: Jun 19, 2013 12:35 pm | Updated Date: Jun 19, 2013 12:35 pm