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Nokia and Apple feature in first M&A rumors of 2013

Nokia could sell hardware to Huawei, but Apple is not about to acquire Waze, say reports


Published: 4 January, 2013

READ MORE: M&A | Nokia | Apple | Location

Industry news remained slow in the first week of the year, and the run-up to the Consumer Electronics Show. The climate was right, therefore, for the first M&A rumors of 2013, which ranged from the predictable - Nokia selling its hardware business - to the realistic - Apple acquiring more maps technology.

The latest speculation about how Nokia may reinvent itself centered on the often-discussed idea that it could get out of hardware, and analyst Tristan Louis of Keepskor believes that the most likely buyer would be Huawei. His crystal ball predicts that Nokia would sell both its mobile phone hardware activities and its stake in Nokia Siemens.

The Chinese major certainly wants to accelerate its progress in smartphones and buying NSN - or a least Nokia's 50% stake - would help it catch up with Ericsson in mobile networks. However, such a deal remains speculative and would entail massive regulatory scrutiny, as well as a more fundamental rethink at Nokia than CEO Stephen Elop currently seems to be contemplating. Getting out of hardware would leave Nokia focused on its software platforms, although it does not control the most important of these, Windows Phone; and on its web services, most importantly the Navteq mapping system.

Mapping is also on Apple's mind after the disastrously mishandled launch of its own rival to Google Maps and Navteq. However, reports that the iPhone maker was in talks to acquire navigation specialist Waze were quickly scotched by a source who told CNet the story - originally mooted by TechCrunch sources - was "completely fabricated", and no negotiations had been held.

Waze Mobile is an Israeli start-up whose system crowdsources mapping data by collecting GPS information as the mobile app is used, and also by encouraging users to update local traffic problems themselves. The reports indicated that the firm would look for about $750m for a sale while Apple was offering up to $500m. The smaller company was founded in 2009 and has so far raised $67m in venture capital. It makes revenue from advertising and is thought to have generated about $1m last year, though its technology and user base, rather than its finances, would be the incentive for Apple or other purchasers. Waze has over 30m users.

Finally on the M&A front, Amazon is rumored to be spinning out its Kindle Lab126 unit, which carries out most of its R&D and develops new products like the e-reader itself. According to EETimes' Rick Merritt, Lab126 is engaged in a major hiring spree, with almost 250 job adverts, and that fact made him wonder whether the division is to be spun out as a separate entity. Among the positions on offer are over a dozen management jobs including an operations manager, and a wide range of hardware engineers for areas such as antennas, RF and test, and software experts for user interface, payment systems and the kernel. Most of the posts are in Cupertino, with some in India, China and the Seattle HQ. All these certainly point to an acceleration of development, probably a wider range of devices and possibly a fully fledged operating system and apps platform. The inclusion of corporate attorneys, IT support staff and operations staff gave rise to the idea that Lab126 might be about to be launched as a standalone firm.

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