Microsoft to Acquire RIM? Nokia?

Reuters recently ran an article about Microsoft shopping around for a mobile device manufacturer. Named as specific potential targets are RIM and Nokia. Apparently, Microsoft believes that the Apple model of vertically integrating handheld hardware and software would work well for Windows Mobile 7 Series, the operating system it recently unveiled at the Mobile World Congress.

If Microsoft acquired RIM, it would have tremendous penetration into the business consumer market for smartphones. Also, a takeover could make sense for RIM which is struggling to make its Blackberry operating system competitive. Specifically, the web browser needs work, although RIM is working on a WebKit web browser. Microsoft knows how to build a browser and I’ve read rumors that Windows Mobile 7 Series will have the be-all-end-all of mobile browsers. (Which may or may not be a great boost to WinMo… it’s, by all accounts, a little late to the party.)  I’ve read on other blogs that Microsoft has tried courting RIM unsuccessfully several times (often citing unnamed sources).

Nokia has struggled in the smartphone market and even though it has killer hardware (like the Nokia N900), it has also struggled on the software side. I’ve heard great things about Maemo 5 but bugs in the OS lead to substantial delays and a miserable launch for the N900. Nokia would be a more expensive acquisition than RIM based on market caps, $49B vs. $38B. It also doesn’t have a strong presence in the U.S. market.

Another potential target is Palm which once dominated the pocket organizer wars but has slipped considerably in recent years. It’s unclear what tricks Palm management might have to resurrect the company because it did not attend the Mobile World Congress or unveil any new products in recent months (other than the spruced up Pre Plus and Pixi Plus, if you count those).

So, it’s not entirely clear who Microsoft wants to take to the prom but, at least according to some of the sources cited by Reuters, it’s planning on going. The Reuters article is available at: http://www.reuters.com/article/idUSTRE61I54A20100219

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