The road that both companies are walking down is taking some turns, and it is uncertain what will happen soon, although there are indications that Nokia will sell its mobile unit to Huwei, and that MSFT is also wanting to purchase Nokia's mobile unit. 

Sources are coming...

Executive briefing: For the first source, Nokia investors are having problems with Nokia being a company that relies on MSFT platform, as it isn't being the boon that the CEO promised for the company a couple of years ago. Several investors have expressed doubts, and some pension funds have sold a large portion of their position in Nokia.

------------------------------
Is Nokia (NYSE: NOK) president and chief executive Stephen Elop on the hot seat? Unhappy investors want to see better results and are making a case that Elop’s leadership isn’t delivering the goods for the storied Finnish mobile device maker, according to a published report.

Nokia skeptics squawked about the company’s flagging performance about this time last year, too. Let see if anything’s changed…

Investors at Nokia’s annual general meeting in Helsinki on Tuesday complained about Elop’s controversial call two years ago to abandon the company’s Symbian operating platform and switch to Microsoft’s (NASDAQ: MSFT) Windows Phone. At the time, though the move raised eyebrows owing to Elop’s tenure as head of Microsoft’s Business Division, he vowed Nokia—and investors—would see positive benefits in two years.

Ok, time’s up.

"You're a nice guy ... and the leadership team is doing its best, but clearly, it's not enough," said Hannu Virtanen, a Nokia shareholder, to Elop, as quoted in the report. "Are you aware that results are what matter? The road to hell is paved with good intentions. Please switch to another road."

In Elop’s defense, Nokia’s Q1 2013 results show improvement. The company moved 5.6 million Lumia smartphones, up 27 percent from the prior quarter and 180 percent year-over-year, with two-thirds of the units sold running Windows Phone. In the 15 months since it began shipping Windows Phone-based Lumia smartphones, Nokia has sold nearly 20 million units. The one blip in its quarterly performance is in North America, where sales dipped by 33 percent.

A further sales spark could come from a rumored Lumia 928 for carrier Verizon (NYSE: VZ), running a Windows Phone 8 update, said to be in the final round of testing.

Simply put, Nokia’s disgruntled investors, used to being at or near the top of the mobile device market, aren’t pleased the Finnish icon lags so far behind leaders Apple (NASDAQ: AAPL) and Samsung. Some also believe that while Elop has given Windows Phone a sufficient chance, it hasn’t worked to plan, and perhaps Nokia should either move to, or add, Android-based phones to its lineup.

Elop reportedly remains committed to Windows Phone. "We make adjustments as we go,” he said. “But it's very clear to us that in today's war of ecosystems, we've made a very clear decision to focus on Windows Phone with our Lumia product line. And it is with that that we will compete with competitors like Samsung and Android."

A nagging question about Elop’s fork-the-road choice of Windows Phone is whether Nokia can compete at the high end of the smartphone market with those two behemoths. By one researcher’s figuring, Windows Phone is making some progress in the U.S. to ebb the commanding lead of iOS and Android-based devices but not necessarily at the high-end of the spectrum. Researcher Kantar Worldpanel ComTech, which tracks global consumer behavior in a variety of fields, estimates Windows Phone-based smartphones make up some 5.6 percent of all smartphone sales worldwide in Q1 2013, up from 3.7 percent at the same time last year.

That’s something but it’s not within shouting distance of iOS or Android. Of note, Kantar said that Nokia’s smartphone share grew to 4 percent in Q1, up from 1 percent a year ago. Nice progress, but, as Nokia’s investors have voiced, not all that great.

In fact, a better play for Nokia might be at the low end of the market, specifically at buyers upgrading from a feature phone to a smartphone.

“Windows strength appears to be the ability to attract first time smartphone buyers, upgrading from a feature phone,” said Mary-Ann Parlato, a Kantar analyst. “Of those who changed their phone over the last year to a Windows smartphone, 52 percent had previously owned a feature phone,” she said.

“Comparatively, the majority of iOS and Android new customers were repeat smartphone buyers, with 55 percent of new iOS customers, and 51 percent of new Android customers coming from another smartphone,” said Parlato. “While the differences between these figures are small, with over half of the US market still owning a feature phone, it’s likely that many will upgrade over the coming year, which will ultimately contribute to more growth for the Windows brand.”

Nokia take note, the data is there for a market switch, not necessarily an OS switch, but a change in market target may be in order.


http://thevarguy.com/business-technology-solution-sales/report-nokia-investors-unhappy-elop-microsoft-windows-phone

Executive briefing: Well guess what? MSFT is also unhappy with Nokia's performance. MSFT is expecting more sales from Nokia, so this is like a couple that is unhappy with each other, not just one partner expressing problems. Also featured in the article, is the expected decline in resources spent on research and development, as well as layoffs. So, expect Nokia to get even smaller in size moving forward.

----------------------
While Nokia’s troubles have been in the public domain for quite a while now, solutions to those problems have been slow in coming. However, shares in the struggling mobile giant were up over night after reports emerged that Microsoft held talks with Nokia with a view to buying the mobile business.
Microsoft, Nokia - All Talk

By their very nature these kinds of rumors come with few facts, but the reports, which originally appeared in the Wall Street Journal, say that talks have stalled over price and Nokia’s “slumping market position.”

Citing “people close to the deal” the report suggests that Microsoft was unhappy with Nokia”s inability to gain ground in the mobile market despite progress made with the Lumia range.

Needless to say neither company would confirm or deny the reports, with a spokesperson for Nokia cited as saying that the two companies often met because of their “deep partnership.”

The price Nokia wants for the mobile business was not revealed, but even with its problems, Nokia’s stock market value is close to US$ 14 billion and half of the revenues generated last year were from its mobile segment.

However, for the moment, it seems all bets are off and that talks are unlikely to resume in the near future, if at all, even if the partnership between the two companies would make such a deal a very nice fit.
Huawei As Suitor

This is not the only sign this week that Nokia may be considering a sell off of its mobile business. Earlier in the week, London’s Financial Times reported that the head of the Chinese electronics giant Huawei’s consumer business group, Richard Yu, had said that they would be open to buying not just Nokia’s mobile business, but the entire company.

Needless to say, market activity following that announcement was brisk with heavy trading pushing prices up by 11%, however unlikely such a deal is.

Leaving aside financial considerations, Nokia is one of Europe’s blue chip companies with alliances all over the continent including a significant partnership with the German giant Siemens, which competes directly with Huawei.

You can just hear the anti-trust alarm bells ringing here not to mention the fact that no matter what European leaders say in public about China, in private they still don’t trust it and are unlikely to be willing to allow Nokia take this road.

All that said, there is a mind-set in Nokia that is now used to the idea that part of its business is going to be sold off.

Even if it has made considerable strides with the Lumia range, to pull itself back to the place it occupied before Apple’s iPhone/iPad business just doesn’t seem possible.

While it is cutting new phone deals with new partners all the time, it has still had to close production and research sites and slash more than 20,000 jobs. On top of this, market analysts cited by the Wall Street Journal predict that for at least the next 7 quarters it will post losses, or at least profits of less than US$ 260 million. Another company to watch in the coming months.

http://www.cmswire.com/cms/customer-experience/microsoft-walks-away-from-nokias-mobile-business-huawei-still-willing-021427.php

Executive briefing: MSFT can't buy Nokia, as MSFT isn't willing to pay as much as Nokia wants.
-------------------------------------------------
Rumours that Microsoft was trying to buy Nokia have proven to be true. The only problem is that the deal will not happen because Redmond does not want to pay enough for the deal.

On Wednesday, the Wall Street Journal claimed that Microsoft has been engaged in "advanced talks" to buy Nokia. But it turned out that the software maker could not get close to the price it wanted for Nokia, which is worth $14.3bn. Microsoft was unhappy about Nokia's weak market position and only wanted to buy the company if it was at a bargain basement price.

But if Microsoft does not buy Nokia there is a good chance that Huawei might. It is only a rumour but the Chinese company is said to be interested. Huawei's Richard Yu told the Financial Times that it was considering these sorts of acquisitions but he did not confirm it.

Executive briefing: Huawei is looking at purchasing Nokia's mobile unit

------------------------------
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://www.ft.com/cms/s/2/ced47926-d80f-11e2-b4a4-00144feab7de.html#ixzz2YTx5moCq

Huawei would consider buying Nokia to help it become the world’s leading smartphone maker, according to the head of the Chinese telecom group’s consumer business.

“We are considering these sorts of acquisitions; maybe the combination has some synergies but depends on the willingness of Nokia. We are open-minded,” said Richard Yu, chairman of Huawei’s consumer business group, ahead of a glitzy launch of its latest premium smartphone, the Ascend P6, in London.
Register for FT.com
If you enjoy technology articles like these, register today on FT.com to see up to eight free stories a month

More
On this topic

Report criticises lack of checks on Huawei
Huawei embedded in UK telecoms
Security alert over Huawei telecoms deal
Cyber security under growing scrutiny

IN Telecoms

PE groups show interest in Scout24 auction
UK court set to decide Turkcell’s fate
SoftBank gets final approval for $22bn Sprint deal
Japan’s NTT DoCoMo looks abroad for telecoms acquisitions

Huawei hasn’t made any major acquisitions in the past, and those close to the group caution that nothing is on the table. But Mr Yu’s bullish comments underline the company’s rapid progress in the mobile phone market and its ambitions to challenge Samsung and Apple for leadership of the smartphone market.

Mr Yu predicted that the smartphone market would consolidate to about three or four companies – and warned that Microsoft’s Windows phone platform used by Nokia as well as Huawei was “weak”. Huawei has mostly adopted Google’s Android operating system for its smartphones.

“Whether Windows Phone [will be] successful is difficult to say – it has a very small market share. [Windows Phones] are weak but still require a licence fee. That’s not good. Android is free.”

Even without acquisitions, Huawei has become the third-largest manufacturer of smartphones by volume behind Samsung and Apple, and Mr Yu said that the company aimed to beat internal sales targets of 55-60m smartphones this year. The pace of growth is such that Mr Yu complained about a shortage of component supplies, which has slowed down manufacturing.

“Twenty years ago, we were nothing but now we have the best quality [phones] and our customers say we are the best,” he said. “We want to shorten the gap with competitors. We want to lead.”

He said that the group, once known for its cheap and basic “feature” phones, will move towards only selling “smart” internet connected phones using its own brand name rather than selling “white label” versions through network operators.

Huawei is investing heavily in producing the next generation of smartphones technology – aiming to be slimmer, lighter and faster than best selling Samsung phones – as well as in wearable smart devices similar to the Google Glass or the rumoured Apple watch.

This week, Huawei is staging its largest Western launch of a premium phone with the Ascend P6, one of the slimmest smartphones on the market. The Ascend P6 has similar specifications as the latest devices from Samsung and Apple, but will be on sale at a lower price.

“I don’t want to ship feature phones any more,” said Mr Yu, adding that Huawei wanted to be seen as the best phonemaker but also with the most reasonable price.

The group’s handset business has not been subject to the same sort of scrutiny over security as its larger equipment business, although Mr Yu said that its focus was mainly on markets outside the US, where concerns were raised following a critical congressional report last year.

http://www.ft.com/cms/s/2/ced47926-d80f-11e2-b4a4-00144feab7de.html#axzz2YTwyNxML

How can Nokia "sell" it's mobile unit to another company? I thought mobile technology was their only business.

Nokia has a telecom infrastructure joint venture with Siemens, and also sells a few laptops, butt you are mostly correct, the mobile business is probably 60 or 70% of its revenue.

I hope they don't sell it, that's all they are know for and their the most innovative phone companies out there. They always try something new and manage to pull it off. And why sell when they are on the comeback?

So if they get sold to that Chinese company, I would guess that Android based Nokia phones would start flooding out quickly?