Cisco mulls acquiring Nokia, report says

Internet equipment maker Cisco Systems Inc. is interested in acquiring Nokia Corp., the world largest manufacturer of mobile phones, according to several media reports citing the Sunday Business newspaper.

A Nokia spokeswoman on Monday declined to comment on the report, which cited unnamed sources.

Cisco spokesman David Cook, while also declining to comment, noted that buying a big company such as Nokia -- which is valued at more than €70 billion (US$87 billion) -- would represent a major shift in the U.S. company's acquisition strategy.

"Of the 103 acquisitions we've made over the past 20 years, almost all of these have been small, technology-rich companies," Cook said. The San Jose, California, manufacturer has a history of buying niche companies with specific engineering skills, such as home networking and security, he added.

Still, some analysts wouldn't be surprised if Cisco bought a wireless player.

"Cisco is always looking to expand its portfolio and wireless is a big growth area," said Mark Blowers, senior research analyst at the London office of the Butler Group, a consulting company.

Moreover, convergence of fixed and mobile networks has become a big topic in the telecommunications market and one that could prompt Cisco to seek wireless expertise, according to Blower. "Cisco has a strong fixed-network background, as Nokia does in mobile," he said. "Cisco could expand on its own into this market but wireless is a complex area. A partner would certainly help."

Nokia, which has seen its profit margins erode due to intense competition from manufacturers of low-cost handsets, is accelerating efforts to capture market share in large developing markets such as China and India