Microsoft scrapped 2011 plans to buy Nokia

The ties between Microsoft and Nokia run deep. But apparently not deep enough for the Redmond-based giant to consider buying the Finnish phone maker.

According to a report from UK-based tech news site The Register, Microsoft had the opportunity to buy out Nokia in 2011 but ran screaming when it got a glimpse at the former phone giant’s books.

As the report’s author Andrew Orlowski notes however, a buyout may have been in neither company’s best interests:

Nokia still has time and cash with which to mount a fight back. Microsoft has time to generate an “ecosystem”, the clunky technology buzzword for what the rest of the world calls “markets”.

The thing to remember is that playing the long game might well work out for both companies. Under Elop, Nokia has shed unnecessary staff and unprofitable departments. And while every other manufacturer is courting Android, it decided to partner up with Microsoft for its OS.

In terms of performance, it’s working too. The Lumia 800 is brilliant. Windows Phone is, if anything, more intuitive than Android and iOS.

Yes, Nokia’s stock may be down but rescuing a brand doesn’t happen overnight. According to Orlowski:

Nokia’s comeback can’t be fairly judged until we’re into the second cycle of products later this year based on Tango – and perhaps even the third, based on Apollo. Elop has already halved the time it takes for Nokia to make a smartphone, simply by shifting to Windows.

Microsoft has also shown its dedication to mobile by pushing Metro on Windows 8. So if things keep going as they are then the future is potentially bright for both companies.

On the other hand, as Orlowski notes, there may not be space for a viable “third ecosystem” in the smartphone world:

In this scenario there’s Apple and Android, leaving RIM and Nokia fighting for crumbs. Today, the health of WP as an “ecosystem” isn’t obvious: Samsung, Dell, LG and HTC all seem to have given up. Only Nokia makes a noise.

The news comes amidst fresh rumors that Samsung was set to make a bid of its own for Nokia. The South Korean giant has flat-out denied that this is the case.