Why Apple Should Buy Nokia - Forbes

Journalist and technologist Tristan Louis has a reasonable argument here for why Apple should buy Nokia, now that the former has driven the latter to the brink of dissolution. His case is built on several points:

• Apple needs more patents to cover its wireless roadmap for the next decade and keep Samsung at bay. Nokia has one of the best and youngest sets of patents around LTE and other 4G wireless technologies. Apple settled out-of-court with Nokia in 2011, a deal Louis hears brought Nokia $500 million and a royalty in the range of $5 to $7 per iPhone, a 1% tax by the Finnish company. The patent portfolio is worth anywhere from $6 billion to $10 billion. Nokia’s market cap today is $10 billion.
• Maps. Apple is way behind here and Nokia has some of the best location software and databases in the industry from its 2007 Navteq deal. Why build when you can buy a distressed Nokia for about the same price ($8 billion) that Nokia (over)paid for Navteq?  Companies such as Google, RIM, Microsoft, Amazon and Samsung all depend in some way on Navteq maps, giving Apple new leverage over those other companies.
• Wireless TV. Nokia has good technology for delivering live TV to wireless devices, and TV is an area everyone is betting Apple moves into.
• Knock Microsoft on its heels. Nokia is one of Microsoft’s bigger, if not the biggest, partners for Windows Phone, especially at the high-end with the new Nokia Lumia handsets. 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.
• Apple would do a deal as a double-reverse with a flip. It can buy the patents and some software engineering (more like what Google did with Motorola) and flip the rest to a telecom equipment maker such as Alcatel-Lucent (likeliest) or Siemens, Nokia’s current wireless-equipment JV partner.

Louis ends with how the deal might play out:
 

With a mar­ket cap of $10 bil­lion for Nokia and Apple sit­ting on a cash pile of over $100 bil­lion, the Cuper­tino giant could fund this from change it found in its couch. For the rea­sons listed above, I sus­pect that Google and Microsoft would also jump into the game, bid­ding Nokia’s share price fur­ther up. But few com­pa­nies have the buy­ing power Apple has and it would even­tu­ally win that fight and, once again, reorder the mobile land­scape while solid­i­fy­ing its own con­trol of the future.

AP Photo/Paul Sakuma

via forbes.com