Samsung in a statement Wednesday declined to comment on talk it might buy Nokia. Spokespeople for both companies would neither confirm nor deny talks and, in Samsung’s case, characterized the mentions to Dow Jones as “market rumors.” Details of the supposed bid weren’t given out, but Samsung would likely be hoping to take advantage of Nokia’s weakened state.
Nokia has been rapidly losing share after years of ignoring the threats from the iPhone and later Android and would be an unusual match for Samsung. In addition to moving upwards in smartphones where Nokia is sinking, its designs are based primarily around Android, an OS Nokia had considered but turned down in favor of Windows Phone because it wanted differentiation. A takeover would probably axe most of Nokia’s existing work.
A strong probability exists that Microsoft would do everything in its power to block the deal, since it would have seen the company waste billions of dollars buying market share through the Nokia deal only to hand it over to one of the world’s largest Android supporters.
Buying out Nokia might make sense as a pure market share play. Samsung has had trouble boosting its smartphone sales quickly enough to completely offset declines in its basic feature phone business. Nokia’s specialty remains in cheap phones, particularly in Africa, India, and other countries or regions where incomes are low enough that a cellphone has to be shared with an entire family. Acquiring it would keep Samsung’s feature phone sales higher and also put it on top of market share for individual device makers.