It has been finally announced that Nokia Siemens has indeed purchased Motorola’s network equipment division. $1.2 billion is not bad considering the fact that they will now be in quite a good position in North America to steadily grow in the market. The purchase will raise a few eyebrows as it really puts them in a really strong position.
New York Times ran a story saying that this purchase was not a sudden decision but the conclusion of a long drawn out effort to compete against the likes of Unlocked Ericsson phone and Huawei of China. They have been repeatedly thwarted in their effort to be able to claim a position such as this and finally they have succeeded by buying the Motorola network equipment division.
The acquisition might prove to be a very valuable one as it gives Nokia Siemens a stronghold in the market of North America. It had failed on two auctions in the past and this acquisition ends that drought. Although, the two companies who had beaten Nokia Siemens in the past are having to pay more annual revenue than Nokia Siemens has to pay for the Motorola business. Nokia Siemens has really met tough competitors in North America but this move will hopefully be crucial for them. A separate venture might be just the perfect choice for Nokia Siemens after this purchase. The competitive market in North America is really not the place for the way to do business which is conducive to Nokia Siemens. So, a split would be advisable after they have purchased the Motorola division.
This purchase may catapult them to new heights but they have to be cautious in the way they approach this move. They can have steady influence in the market but it has to be well planned out. Only time will tell how influential would this purchase be.