Will This Smartphone Buyout Rumor Ever Die?

Welcome back, Microkia rumors. Gosh, it's been forever, how are things? How long has it been? Has it really been four months already? Wow, it feels like just yesterday we were talking about why you shouldn't exist.

The most recent round of "Will Microsoft (Nasdaq: MSFT  ) buy Nokia (NYSE: NOK  ) ?" is being sparked by analysts from Danske Bank, Denmark's largest bank, who are suggesting that the Finnish cell phone maker is planning on selling its smartphone business to the Redmond giant early next year. That presumption even led the bank to up its rating on Nokia shares from "hold" to "buy."

While I doubt that Danske's analysts are privy to what Microsoft CEO Steve Ballmer and Nokia CEO and ex-Microsoft exec Stephen Elop say behind closed doors, in fairness, at least the source is slightly more credible than a Russian tech blogger. There was some short-lived unofficial speculation after Google (Nasdaq: GOOG  ) acquired one of its OEM hardware vendors, Motorola Mobility (NYSE: MMI  ) , which naturally led wandering minds to ponder the possibilities.

The only compelling argument for such a preposterous notion would be if Mr. Softy wants to embrace an Apple-esque (Nasdaq: AAPL  ) integrated hardware-software approach to smartphones, ditching decades of an open philosophy.

More importantly, what does Nokia have that Microsoft doesn't already have? A smartphone business that's shrinking revenue 39% year-over-year, for starters, but I doubt Mr. Softy wants that. Microsoft already has what it needs: a hardware partner to fully support the fledgling Windows Phone platform.

The Xbox 360 gaming console is about the only notable hardware business Microsoft is in, since I hardly consider its keyboard and mice business "notable." The idea of Mr. Softy venturing into what is quickly becoming one of the most cutthroat and competitive hardware sectors when it already has what it needs from Nokia is unthinkable. At least Nokia itself is also brushing aside this latest batch, responding, "We put these rumors to rest a long time ago."

Farewell for now, Microkia. See you again in T-minus three months. If you wanted some real legs to stand on, you could learn a thing or two from your next of kin, Microhoo. At least that one has some basis in reality.

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Fool contributor Evan Niu owns shares of Apple, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Microsoft, Google, and Apple. Motley Fool newsletter services have recommended buying shares of Google, Apple, and Microsoft; and creating bull call spread positions in Apple and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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