Stock prices surge on news of Nokia-Microsoft deal

The smartphone business supply chain in China reacted feverishly Tuesday following Microsoft's announcement that they had purchased Nokia's Devices and Services unit for 5.44 billion euros ($7.2 billion). However, analysts said the acquisition will have limited impact on Chinese mobile phone market share, at least in the short term.

While Chinese former users recalled nostalgically the days when Nokia handsets dominated the market and were deemed leaders of youth fashion, shares in several Chinese equipment and raw material suppliers for Nokia saw a dramatic rise Tuesday, prompted by the news of the new deal.

Xingxing Firstar Panel Technology Co., a display maker for mobile phone and tablet computers, witnessed its share prices surge to the daily limit.

Beijing Easpring Co., a supplier of new energy materials for making small lithium batteries and power batteries, saw its share prices rise by 6.47 percent to 10.7 yuan ($1.75) per share Tuesday.

"It is good news for the whole supply chain of smartphones in China," Qu Xiaoli, Secretary to the Board of Directors at Beijing Easpring, told the Global Times Tuesday.

Qu's company is one of the suppliers of energy materials for making Nokia's batteries, but its business has been affected since 2010, due to Nokia's poor performance.

Further information on the Microsoft-Nokia deal is not disclosed yet. Gao Xiang, public relations manager of Nokia (China). told the Global Times Tuesday that more details will be released in the first quarter of next year.

Senior managers in the Chinese mobile phone sector, which is witnessing a chaotic time of fierce competition among rising manufacturing giants and innumerous newcomers, also paid great attention to the Microsoft-Nokia deal.

"The mobile phone market is undergoing a period of integration, and no more than four handset makers can survive (from the competition) in the future," Yu Chengdong, senior vice president of Huawei Technologies, a leading Chinese telecom solutions provider, said on its Weibo Tuesday.

Yu told the media in June that "Huawei should purchase Nokia," which raised a mass discussion online.

Industry watchers thought it was a "win-win solution" for both of the enterprises. "Microsoft has always been trying to expand its mobile Internet market, and Nokia, whose manufacturing technology for handsets is advanced, urgently needs to look for a 'savior'," Cao Yujie, director of consultants for IT market research agency CCW Research, told the Global Times Tuesday.

Cao noted that Nokia's hooking up with Microsoft will not change the current market share for the smartphone maker in the short term.

The Android operating system still dominated the Chinese smartphone market with a 67.8 percent market share in the second quarter of this year, Apple's iOS accounted for 24.7 percent, while Microsoft's Windows took only 4.9 percent, according to the data filed with Industry tracker Kantar Worldpanel ComTech.

As far back as to 2011, Nokia announced that it will gradually ditch its own Symbian operating system and focus on smartphones, which use Microsoft's Windows Phone operating system.

However, Nokia still reported a loss of 227 million euros globally in the second fiscal quarter this year, though that was 83.9 percent less loss than the previous year.

Nokia's sales revenue for the Chinese mainland, Hong Kong and Taiwan, declined by 57 percent in the second fiscal quarter year-on-year to 232 million euros.

Nokia's smartphone sales in China rank below not only Samsung and Apple, but also Chinese brands such as Lenovo, Huawei and ZTE.