Nokia Siemens Networks Buys Motorola Networks Business

Before you all get excited let me make this clear: Nokia hasn't bought Motorola. In fact, it's not actually Nokia that's buying and it's not actually Motorola that's for sale. Instead, this little billion-dollar deal saw Nokia Siemens Networks acquire Motorola's networks business.

In 2007 Nokia and Siemens fused their network equipment and solutions enterprises in a joint venture. Each company has a 50% stake in the new company created, Nokia Siemens Networks (NSN). Meanwhile, not so very long ago, Motorola expressed an interest in separating its business activities into two separate units: Motorola Mobility for consumer products (handsets and decoders) and Motorola Solutions for professional equipment.

Although the separation of Motorola's activities is only scheduled for completion in 2011, NSN has already snapped up the Motorola networks business for $1.2 billion. Motorola will, however, be hanging on to its patents.

Mobile phone companies seem to be slowly devolving their activities. Motorola was one of the last network equipment providers to also double up as a handset manufacturer. NSN is a separate company to both Siemens' and Nokia's consumer handset businesses, Alcatel-Lucent has given up making handsets to concentrate on networks, and Ericsson has teamed up in a well-documented partnership with Sony. The only all-round contender left it Huawei, a telecoms solutions provider striving to make a name for itself in the consumer market with entry-level handsets.

How does it affect Nokia?

The Nokia handset manufacturing company we're all familiar with doesn't really have much to do with this acquisition. The Finnish mobile maker isn't buying Motorola Mobility, which will remain one of its main competitors.

Nokia is lagging behind in the smartphone market, with MeeGo and Symbian^3 (which still hasn't been fully rolled out onto the consumer market) not doing much to help the firm get back on top of things just yet.

Nokia's fate isn't helped by the fact that current market leaders, namely Apple, Google, RIM and Samsung, have all been quick to understand the importance and widespread appeal of a high-quality interface, a stylish design, and availability and pricing. Nokia can't even really hope to be competitive in the smartphone market before early 2011, the provisional release date for the firm's first smartphone running on Symbian^4.



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