Microsoft may be forced to give Nokia a bail out

Microsoft may be forced to bail out Nokia

Nokia continues to struggle as the once dominant cell phone maker continues to lose share in both the smartphone and broader mobile market. The Finnish vendor’s Lumia handsets have yet to take off and Nokia’s stock has tumbled 90% over the past five years. Nokia CEO Stephen Elop may look toward his former employer, Microsoft, to step in and help the troubled handset maker, Reuters suggests. The company’s partnership with the software giant is seen as a last chance to turn its business around. Microsoft is already paying Nokia $1 billion a year to use the Windows Phone platform, and many analysts believe the company may be willing to help out further if Nokia’s problems were to intensify.

“If Nokia ends up in financial difficulties I believe the helping hand would be there,” said Sami Sarkamies, an analyst at Nordea. Another technology banker agreed, saying “I don’t see Microsoft owning Nokia, but it would definitely provide financing to the tune of a couple of billion dollars.”

If Microsoft were to support Nokia, it would most likely be in the form of an inter-company loan or an equity stake, rather than a full takeover, the report suggests. Despite having nearly $60 billion of cash, the the Redmond-based company has traditionally steered clear of the hardware business where mobile is concerned.

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