Nokia Shares Leap 15% on Google's Acquisition of Motorola
Google's (NAS: GOOG) acquisition of Motorola Mobility (NYS: MMI) led to Android handset makers statements welcoming the move as something that will protect the Android ecosystem, as industry analysts meanwhile struggle to compute the full implications. But European stock exchanges have been clear in their understanding by pumping Nokia's (NYS: NOK) share price nearly 15 percent higher since the news was announced on Monday.
The reason behind this upsurge in enthusiasm for Nokia stock came from investors who think that Google's purchase of Motorola Mobility would boost the likelihood of Microsoft making a bid for Nokia.
Dismissing this speculation, Nokia stated in a reported carried by the Financial Times that Google's move reinforced its belief that Windows Phone gave the company the greatest chance of growing its smartphone business. "This could prove to be a massive catalyst for the Windows Phone ecosystem," the company said in a statement.
Apart from this industry chatter on Microsoft's possible intentions, the impact of Google's acquisition has so far stirred little interest Europe.
While Motorola had been a leading player in the handset business in Europe, the consensus view is that it had retreated to focus on its home market as its lacklustre devices failed to gain the attention of consumers.
David McQueen, principal analyst with Informa Telecoms & Media, told FierceWireless:Europe that Motorola phones now have less than a 4 percent share of the European market, "and they've retrenched to the U.S. and focused on a single OS."
"But the prospect of Google turning into another Apple [supplying the OS, handset and eco-system] will not be greeted with enthusiasm by European operators," he said. "They were pleased when Nokia announced its alliance with Microsoft because it provided them with the strong and viable alternative to Apple's iOS and Android."
McQueen also noted that this upheaval to the handset OS and vendor market could bring into question how some of the minor Android players, such as LG or Sony Ericsson, will survive this move given the low volumes they currently ship. "Samsung and HTC go from strength-to-strength in Europe, and seem happy with their ability to cope with Google's ambitions," he said.
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