Nokia’s Real Value to Microsoft is Outside of the Phones

The rumored Microsoft/Nokia merger has been, for now, debunked. But if Microsoft wants anything from Nokia, it should be the Finnish firm’s non-wireless products. If Microsoft’s relationship with Nokia should deepen, it would give Redmond access to a few gems in Nokia’s closet that could be at least as valuable then the wireless handset business.

A slow news week earlier this month gave rise to some excitement that Microsoft was looking to buy Finnish mobile phone maker Nokia for $19 billion. Once again, Mark Twain’s old maxim that “A lie gets halfway around the world before the truth gets its boots on” was proven true. The origins of the rumor were traced back to a Russian blogger with a spotty track record who dropped the hint on Twitter. One tweet and we had headlines all over TechMeme. (Seriously, people balked that Microsoft paid $8.5 billion for Skype … $19 billion for Nokia, a company in freefall, is ludicrous.)

But there are reasons why Microsoft would want to deepen its hooks into Nokia be that via an acquisition or some other kind of partnership arrangement.  Nokia owns a few hidden gems that could prove far more valuable to Microsoft than the wireless handset business. The rumor among financial industry is that if Microsoft doesn’t sink its hooks into Nokia, then another big name electronics manufacturer will likely buy the company for the following assets.

Qt Software: Nokia acquired this Norwegian firm, formerly known as Trolltech, in 2008. It makes an application development framework called Qt, a multi-platform Graphical User Interface (GUI) framework written. Developers can build an application GUI in C++ although they also have bindings into other languages, like Java, Ruby and Python.

Qt is on multiple operating systems, desktop and mobile, allowing developers to write on version of an app’s UI and easily port it across platforms for a common look and less development headache.

Qt is popular with the open source community, but it is also used in apps like Google Earth, AutoDesk’s Maya and Adobe’s Photoshop Album. It’s on platforms ranging from Windows and Mac to Linux and Windows Mobile. Adding the Qt framework to Visual Studio would make application porting considerably faster.

Qt needs to be in the hands of a developer company, and for all of Microsoft’s missteps in recent years, the developer side of Microsoft has held the course. The caveat is that Microsoft has never been good at open source, although it has tried, and the open source community still gives Microsoft the old side-eye at best. Would they trust Microsoft or would there be a flight of support, like Sun has suffered under Oracle? It remains to be seen.

Navteq: Another peculiar Nokia acquisition, this time an American company. If you own a GPS made by Garmin, Magellan, Lowrance, or NDrive or have used Yahoo! Maps, Bing Maps or MapQuest, you have used NAVTEQ’s maps. Just the fact that Bing and Yahoo are using the maps means that over time, this purchase would pay for itself.

Having a mapping firm in-house has so many obvious benefits for Bing services, and Microsoft would finally be able to control the fate of its map services, rather than be at the mercy of its licensor.

It would also give Windows Phone tremendous new capabilities for local search and real-time updates. Sirius-XM satellite radio uses NAVTEQ for data aggregation on their 24-hour traffic channels.

Nokia is a company in trouble, rapidly losing market share as it is surpassed by Android and iOS. It will take two years for it to transition from Symbian to Windows Phone and stands to bleed a lot of money between now and then. Paring off two illogical acquisitions (perhaps selling them to Microsoft, or offering some other form of partnership agreement) would give it a badly needed cash infusion and put those two subsidiaries in the hands of a company that can better use them.