Feature Article

July 31, 2014

Wheelings & Dealings: Nokia Acquires a Healthy Portion of Panasonic

If we look at everything that has been going on lately with Nokia, we see a pattern—the company’s future is focused on providing network solutions, rather than mobile phones. All appearances show that this seems to be a move that has been good for Nokia. The company made big profits in the second quarter of 2014 after it sold its mobile devices unit to Microsoft. Its overall profit was $3.36 billion, mostly due to the infusion of cash from Microsoft.

Over the past couple of years Nokia has been shopping. Last year Nokia acquired earthmine, Inc., which uses vehicle mounted camera rigs to capture imagery and three dimensional data of the urban environment. IT also picked up Scalado which is a provider of imaging technologies, application and engineering services for the camera (phone) industry.

Thanks to this injection of Microsoft cash, Nokia seems to be on another buying spree. Nokia has been acquiring businesses such as Chicago-based SAC Wireless, a company that develops and implements network infrastructure for telecom companies throughout the United States. Nokia acquired Mesaplexx, which gives the Finnish company the technology to shrink its base stations and small cells.

Nokia has also been focusing on its mapping company called Here. After buying a travel guide company called Desti in May, the acquisition in June was analytics company Medio Systems. Here, formerly Nokia Maps, is a Nokia business unit that brings Nokia's mapping and location assets together under one brand. The technology of Here is based on a cloud-computing model, in which location data and services are stored on remote servers so that users have access to it regardless of which device they use.

The shopping spree for Nokia continues as it is poised to acquire Japan’s Panasonic unit that focuses on network equipment. Nokia is looking to expand its remaining businesses, which include the cellular equipment business, the Here mapping division as well as a patent-licensing operation.

In a statement, Ashish Chowdhary, Nokia’s executive vice president, said “Japan is a key market for us, and this agreement is a major milestone in forging closer ties in Japan. The acquisition of part of Panasonic’s wireless network business would further strengthen our mobile broadband portfolio and add significant value for Japanese operators.”

Nokia did not say how much it would pay for the unit, which makes wireless base stations for third-generation and fourth-generation LTE cellphone networks. Both companies said that they hope to finalize terms of the deal by September and close the transaction by the first of January 2015.

Edited by Maurice Nagle

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