Nokia Sells Messaging Business To Synchronica

by Gaurav Kheterpal on July 1, 2011

To this point, 2011 has been a forgettable year for Nokia. In April, Apple passed Nokia during the first quarter to become the world’s largest vendor of mobile phones in terms of revenue. Shortly after, the Finnish giant was forced to dump the Symbian platform and 3000 employees to Accenture.

The company’s public image has taken a severe beating and there seems to be no end in sight on Nokia buyout rumors. First, it was Microsoft, and later Samsung but both proved to be false alarms. Analysts believe that Nokia needs to offload some of non-core business lines and go back to what it does best – manufacture smartphones.

To that effect, Nokia yesterday sold its Operator-Branded Messaging business, which it acquired only three years ago, to Synchronica for $25 million.

Synchronica, a communication systems provider for mobile operators, has a strong presence in markets like South America, Europe, Russia, and Asia. The company provides software that allows mobile operators to bundle e-mail, IM and social networking features into the devices they sell to customers. Acquiring the OBM business from Nokia provides Synchronica with a perfect launch platform in North America as it will acquire six million users across ten carriers, including all four major U.S. carriers and Rogers and Telus in Canada. Synchronica’s market will now extend to approximately 1.8 billion end-users worldwide.

As part of the deal, Synchronica and Nokia will enter into a long-term relationship in which the former will provide the messaging software which the latter will continue to pre-load on its Series 40 phones. Synchronica will take end-to-end control of Nokia’s messaging software. The acquired technology includes Nokia’s industry-leading Email, IM and Social Networking Gateway and client software. Nokia will transfer approximately 250 employees, externals and contractors to Synchronica.

Synchronica says it plans to merge its current messaging infrastructure applications and its new Nokia assets to create an improved solution over the course of next 12 months.

“This acquisition marks a key milestone for Synchronica as we move closer to our goal of becoming the leading global player for next-generation mobile messaging,” Synchronica CEO Carsten Brinkschulte said in a statement. “Nokia’s successful and highly complementary Operator Branded Messaging business will at a stroke transform Synchronica’s scale, profitability and geographic scope.”

The deal is being projected as a win-win situation for both companies. The little-known messaging solution provider now gets hold of Nokia’s 12 U.S. patents as well as a license to another eight patents to allow it to do business. Nokia will save costs as it no longer has to run the OBM or support its operational costs, and it will help bring the headcount down as well.

The deal, subject to regulatory and shareholder approval, and is expected to close in late July.

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Written by: Gaurav Kheterpal. Follow TheTelecomBlog.comby: RSS,TwitterFacebook, or YouTube.

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