While Nokia might be in high spirits with the launch of their latest smartphone, the PureView 808 complete with 41 megapixel camera, it seems the company’s stocks really aren’t in the margins they hoped for. The rumours about a takeover are rampant once again and the ailing company gears up for what could be a long stretch of the next quarter.
They might just resume their title of the world’s best camera phone with the new launch putting their existing N8 down to the number 2 spot, but if they don’t manage to improve on overall performance, their stocks could take another hit. As of last Wednesday, their shares were down eight cents, or 2.8 percent, to $2.79 and have slipped 49 percent, since the beginning of April. With this decline, it’s only natural that the takeover rumours would be floating around or at least the speculation of mergers-and-acquisitions could be considered justified.
It was also recently speculated that big players, like Samsung Electronics, were interested in the Finnish company. The speculation for a buyout actually caused Nokia shares to rise by as much as 6 percent. However, after the rumour was dismissed by the Korean company, Nokia’s shares dropped by 2 percent. “Such reports are purely speculative and are not true,” Samsung is reported to have said.
Nokia may have a fair share of the market in the lower end segment, but needs to push harder in terms of innovation to capture the hearts of the high-end smartphone users. It’s possible that the company would require help from partner Microsoft to help bail them out of these troubled waters as some bankers are already speculating. Microsoft is already paying Nokia $1 billion a year to use its software on Lumia smartphones. And some investment bankers familiar with the technology sector said the support could extend well beyond that amount, if Nokia's problems intensify.
Another avenue that the Finnish company is exploring is the domain of patent royalties. In a recent report, the company is said to have been taking in at least 500 million euros a year from its patent royalties in key areas of mobile telephony. Some analysts even speculated that a more determined application of its patent rights could boost the company’s income by hundreds of millions of euros a year. Alternatively, a sale could generate billions of euros.
Things aren’t looking too good for the once King of the mobile phone domain and the potential for it to get worse is like a dark cloud looming over the Finnish company. We can only hope that the arrival of new devices and innovations will help them slowly climb out of the slump they’re currently in.