Nokia Corp. (NOK), the largest mobile phone manufacturers of the world, entered into an agreement to acquire full ownership control of Novarra, Inc., a privately-held company based in Chicago. Novarra specializes in developing high speed mobile web browsers. Novarra’s offerings include full rich web browsing, search, widgets, apps, video and advertising.
Nokia will use Novarra’s mobile browser and services platform for its low to mid range handsets targeting the emerging markets where wireless services are still under penetrated. Although the financial terms of this agreement are not disclosed, Nokia announced that this deal is likely to be completed in the second quarter 2010 subject to the regulatory approval. The company is expecting to offer a new service using the Novarra technology platform from late 2010.
According to our view, this new strategic move will be incrementally beneficial for Nokia. The company commands 50%-60% market share for mobile phones in the two most powerful emerging markets of China and India. However, Nokia’s S60 mobile web browser is not the best one in the industry and criticized for its poor performance compared to any mobile phone based on Google Inc’s (GOOG) Android platform as well as Apple Inc’s (AAPL) high-end iPhones. Acquisition of Novarra may help Nokia to offer high quality mobile user experience to its customers.
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