Once the darling of the mobile industry, Nokia has struggled to compete in recent years and may be considering drastic action to remain competitive.
In the ‘90s and early 2000s, Nokia was the dominant mobile phone maker, at one point achieving over 40% market share worldwide. As touchscreen smartphones, such as iPhone and Android became more popular, Nokia’s mobile business collapsed, leading the company to sell it to Microsoft and focus on network equipment.
With the roll out of 5G, Nokia is one of the three main companies providing the equipment for wireless carriers, along with Huawei and Ericsson. Despite the prospects, Nokia has warned it will not return to profitability until at least 2021 and its shares have lost a third of their value over the last year.
As a result, Bloomberg is reporting that Nokia is considering more drastic measures, including possibly selling off some of its assets or even merging with another company. One of the most likely scenarios would be a merger with Ericsson although, as multiple outlets have pointed out, such a deal could create as many problems as it solves.
Even so, a merger with Ericsson could potentially help both companies better compete with Huawei, who is widely seen as having a significant advantage in technology and scale in the race to 5G. U.S. Attorney William Barr even proposed the idea of the U.S. investing in Nokia and Ericsson, acquiring an ownership stake in the two companies, to help them better compete with China-backed Huawei.
At this stage, there is no definitive plans for Nokia, and Bloomberg’s private sources say the talks may ultimately come to nothing. Either way, we will continue to update as the story develops.
