March is nearly over and Microsoft won’t meet its expected date to finalize its $7.2 billion acquisition of Nokia’s phone hardware line. The deal, announced in September, was planned to close in the first quarter of this year but on Monday, Nokia released a statement saying it now has an April target date. Regulators in the U.S. and EU have already given their blessing, so what’s the hold-up? Perhaps the world’s biggest smartphone market: China.
Nokia’s statement doesn’t mention the specifics keeping the deal from closing but GeekWire points out that earlier in the month, several companies asked China to consider what the impact could be to patent licensing fees. You might have heard of two of the parties involved: Google and Samsung, the pair of companies responsible for the largest share of Android phone sales in the world. They joined Huawei and ZTE, a pair of Chinese handset makers, who reportedly asked the China Ministry of Commerce to put conditions on the deal as part of the approval.
The latter two phone makers haven’t been able to break into the U.S. phone market in a meaningful way, so a Microsoft-Nokia tie-up isn’t going to help their cause. Samsung doesn’t have that problem, of course, as it’s the top seller of Android phones in the U.S., not to mention around the world. So why would Samsung have concerns? The company — along with all other Android device makers — already pay patent licensing fees to Microsoft for some of the bits in Android; so much so that Microsoft has made more from those Android fees than it has from its own Windows Phone software. Samsung, as well as Google, wouldn’t want to see rising or additional fees if Microsoft absorbs Nokia’s hardware business and any patents that come along for the ride.