Nokia’s decision to pay $2.2 billion to buy out the remaining stake in the Nokia Siemens Networks business is expected to put a major strain on its cash reserves, Reuters reports. In fact, Reuters notes that the combined pressures of paying for the NSN acquisition and maintaining its handset business mean that the company “could burn through its cash as soon as next year.” Pohjola analyst Hannu Rauhala tells Reuters that this could further erode Nokia’s position in the mobile market because “if they constantly have to be worried about the cash position, it restricts their ability to move, to react to changes in the market.” The surprise full acquisition of NSN has sparked speculation that Nokia may be planning to spin off its handset business to Microsoft, although Microsoft recently backed out of merger negotiations with the company because it was reportedly worried about Nokia’s low market share.
Reuters: Nokia ‘could burn through its cash as soon as next year’
Published Jul 2nd, 2013 6:00PM EDT
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Brad Reed has written about technology for over eight years at BGR.com and Network World. Prior to that, he wrote freelance stories for political publications such as AlterNet and the American Prospect. He has a Master's Degree in Business and Economics Journalism from Boston University.
