his week, Nokia announced that it would lay off 10,000 workers and reduced its profit forecast, causing the Finnish cellphone maker's share price to sink 18 percent. Nokia continues to get crushed by Apple and Samsung in the smartphone market, having failed to make an impact with its Lumia phone, which runs on Microsoft's Windows Phone operating system. Analysts don't hold out much hope for Nokia, with some saying it has only six months to supercharge its smartphone sales — or die. That poses a big problem for software giant Microsoft, which badly wants to be a smartphone player, but relies on Nokia to make the actual phones. Should Microsoft just acquire Nokia?
Microsoft might not have a choice: Microsoft "could be forced to rescue" Nokia if the phone maker can't get its act together, says Juliette Garside at Britain's The Guardian. Nokia, whose prospects are entwined with Microsoft's, is the "only company attempting to sell significant numbers" of Windows Phones, so allowing it to go under would seriously damage Microsoft's attempts to carve out a space in the booming market for smartphones and tablets.
"Nokia's survival in question after 10,000 more jobs cut"
No. The two companies would never gel: It's rare for a merger between a software company and a hardware company to work out, analyst Rob Enderle tells ComputerWorld. The respective business cultures are vastly different. Plus, it would be hard for Microsoft, based in Redmond, Wash., to run a distant Finnish company without running it into the ground. And it's in Microsoft's interest to work with several hardware vendors to develop Windows Phones. It shouldn't be seen as exclusively partnered with Nokia.
"Should Microsoft buy Nokia? Bad idea, say analysts"
But Microsoft should stick with Nokia: A merger would saddle Microsoft with an ailing, money-bleeding company, says Benjamin Pimentel at Marketwatch. But Microsoft needs Nokia to stay afloat if it wants to be a serious player in the industry. The best course is to double down on its investment in the Lumia, and hope that it can gradually claw out more market share for the phone.
"Nokia becomes riskier partner for Microsoft"
- How does chocolate milk stack up as a sports drink?
- Why Republicans shouldn't get too excited over Obama's stumbles
- Diagnosing the Home Alone burglars' injuries: A professional weighs in
- The 10 worst-reviewed movies of 2013
- 10 things you need to know today: December 11, 2013
- The last racial taboo
- TIME chose Pope Francis as its Person of the Year. And it was the perfect choice for the Upworthy era.
- 7 enduring lessons from It's a Wonderful Life
- How did Love Actually become so controversial? A theory
- Watch The Daily Show mock the NSA and the gamers they're spying on
Subscribe to the Week