Here's Why Microsoft Buying Nokia Might Actually Make Sense (MSFT, NOK, RIMM)

Today's wacky mobile industry rumor is that Microsoft could be interested in buying Nokia's mobile phone division, on the heels of the companies' Windows Phone 7 partnership.

Now, this is pretty out-there. The deal would be huge -- Nokia's market cap is $32 billion -- and it would be a big shift in Microsoft's focus. So it's easy to laugh this off as a big, silly rumor.

But there's one reason why Microsoft potentially buying Nokia actually makes sense.

Because it's the only way that Microsoft could ever make enough money off Windows phones to matter.

Apple, HTC, and RIM have shown that when a smartphone company is performing well, there is a healthy amount of profit to be made. Apple likely makes a few hundred dollars in profit per iPhone sold, for example.

Meanwhile, Microsoft has been trying to use the Windows model for mobile operating systems for the last several years, and that just doesn't really work in mobile. The per-device license fees are just too small -- likely less than $15 per phone -- and don't add up to big-enough numbers to make much of a difference, especially for a company as big as Microsoft.

If Microsoft did buy Nokia, and could somehow, miraculously, figure out a near-Apple-like quality of hardware and software integration, and sell a bunch of phones, there's quite a lot of profit that can be made. (Especially if they can do something creative with Skype, which Microsoft bought last week.)

And that's why Microsoft may want to own the whole thing, and not just sell Windows Phone 7 licenses to Nokia, who makes the real profit on the device sale.

(Yes, this could potentially alienate other potential partners, like HTC, Samsung, etc. But if it's not going to get Android-like distribution from those companies, that's a risk worth taking if Microsoft can make all of the profits from Nokia smartphone sales. Meanwhile, a Nokia-Microsoft deal would almost certainly end the potential for Microsoft to acquire RIM.)

Again, this is way out there, and would be very risky. But it's not completely stupid.

Read: How To Use Your iPhone On Vacation (The Right Way!)

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• Microsoft: Skype Buy Is About Business, Not Consumers

Here's Why Microsoft Buying Nokia Might Actually Make Sense (MSFT, NOK, RIMM)

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Here's Why It's Still Smart To Work With Nokia (NOK)

Nokia is obviously in a tough spot in the smartphone industry, but it can still be helpful for small companies to work with them, if the economics work out. 

Take Foursquare, for example.

Not only is Nokia developing their Symbian apps for them -- apps that Foursquare may not have made otherwise -- but it is also promoting the Foursquare app and brand around the world in Nokia advertisements.

We spotted this one last week in tiny Tarifa, Spain, on vacation. But Foursquare mobile partnerships exec Holger Luedorf tells us that they are all over the place.

Luedorf says it's hard to tell if the ads have helped grow Foursquare's user base, but they definitely help generate brand awareness.

Of course, most startups won't get this sort of treatment. There's only one Foursquare, one Angry Birds, etc., and it helps to be a cool brand that bigger companies want to align themselves with.

But the point is that industry giants like Nokia and Microsoft, which are st rugging in mobile, still have a ton of cash to throw around at smaller companies.

So even if they aren't as strategically important as developing for Apple, Google, Facebook, Amazon, etc., it can be smart to work with them.

Don't miss: Take our photo tour of Foursquare's NYC headquarters →

For the latest tech news, visit SAI: Silicon Alley Insider. Follow us on Twitter and Facebook.

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See Also:

• Microsoft's Secret Plan To Disrupt Google Maps On The iPhone
• Microsoft Buying Skype Would Make No Sense
• Check Out This Startup Office: An Amazing 3-Level Apartment (PHOTO TOUR)

Here's Why It's Still Smart To Work With Nokia (NOK)

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Nokia Execs Go Missing For Two Months Every Year (NOK, AAPL)

Every year, Apple starts selling an updateded iPhone in July.

You'd imagine executives at the world's biggest cellphone company, Nokia, would be working their butts off during that month, dealing with an annual seismic shift in their space.

You would imagine incorrectly.

According to Adam Greenfield, a design consultant who spent two years with Nokia, July is the month executives at the company always check out – until September.

“In mid-July, Nokia House is a ghost town,” Greenfield tells Bloomberg BusinessWeek.

“If you need a decision and the key person’s at the summer cottage? Forget it. You’ll resolve that issue in September. It’s something that hampers their agility.”

No kidding. According to the same Bloomberg BusinessWeek article, Apple gets 3X more revenue per employee as Nokia and HTC gets 2X.

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See Also:

• Amazon Blasts Into Music Streaming Market With Cloud Drive
• iPhone 5 Might Not Launch Until Later This Year... Or 2012?
• Apple "Will Unveil The Future Of iOS" At WWDC June 6-10

Nokia Execs Go Missing For Two Months Every Year (NOK, AAPL)

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Microsoft Will Pay Nokia Over $1 Billion For Phone Deal (MSFT, NOK)

Microsoft has agreed to pay Nokia more than $1 billion over five years for choosing its Windows Phone platform to power future smartphones, Bloomberg reports.

Microsoft is offering some of the money up front to help Nokia market and develop the phones, and the total payments are spread over five years. It will hope to earn its investment back from royalties as Nokia begins to sell Windows phones.

Nokia will have to sell more than 60 million phones, as Microsoft is estimated to charge no more than $15 per handset for Windows Phone. 

That's quite likely, assuming Nokia's business doesn't collapse between now and 2012, when the deal is likely to start: Nokia sold more than 100 million Symbian handsets in 2010.

Having a competitive smartphone platform is also important to protect Microsoft's core enterprise software business against non-Windows platforms like the iPhone/iPad and Android.

The report is the first to put a number on the deal. Intel CEO Paul Otellini earlier said that Microsoft paid "incredible" money so Nokia would choose it instead of Google's Android platform.

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Microsoft Will Pay Nokia Over $1 Billion For Phone Deal (MSFT, NOK)

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