UPDATED 09:50 EDT / JANUARY 06 2012

Nokia Buys Smartphone OS While Doubling as an Acquisition Target

It seems that Nokia is not content with already having two mobile operating systems, having just bought one more to expand its portfolio. The Finnish handset giant has acquired Smarterphone, a small Norwegian company, which has an operating system for basic cell phones, known as feature phones in the mobile industry.

Nokia already has Microsoft’s Windows Phone platform under its charge, as well as its very own Symbian platform. While the latter one is used for low end devices, the former is utilized for high end smartphones. It’s still not clear how Smarterphone’s operating system will be utilized in Nokia’s portfolio.

“The Smarterphone operating system is designed to allow basic phones with lower-end hardware to feel more like smartphones. The software also allows the company to tailor the software to different markets”, informed Smarterphone’s Nordic investor parent, Ferd Capital.

Nokia has a long dated history in the global mobile phone industry, but has seen significant decline these past few years. Nokia attempted a big comeback with its new smartphone and a Windows 8 tablet. The company launched Lumia 800 smartphone that runs on Windows 7.5 platform, and is significantly cheaper than the likes of Samsung Galaxy S2 or iPhone 4S. It is the first Windows Phone 7 Mango to reach the market, and runs on a single-core 1.4-GHz Qualcomm S2 SnapDragon processor, but is limited to 512 MB of RAM.

Nokia refreshes its hardware partners, too

Amongst all this, Nokia also got a new chipset supplier, ST-Ericsson. With this deal, ST-Ericsson will be supplying its technology in the form of chipsets to Nokia, which will enable the cellphone vendor to offer cheaper Windows devices. This is a really good sign for Nokia, expanding  affordable Windows phones offerings.

Nokia an acquisition target itself?

While all these developments are going inside Nokia’s realm, on the flip side, Microsoft is eyeing Nokia’s smartphone business. The deal could be announced as early as the first half of next year, some analysts say, with a price tag of $19 billion for the Nokia unit. The key executives of both companies will reportedly meet at Consumer Electronics Show in Las Vegas to finalize the sale.

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