Nokia And Alcatel Lucent ( France ) Essay

714 Words May 1st, 2015 3 Pages
We live in a very different time in terms of innovation and research. It is funny how small, start-up companies can become market leaders and change the structure of industries within a matter of days with a breakthrough technology or process. We live in a day of age where there is no such thing as static market power in the electronics industry, because almost anything and everything may be imitated with the current manpower and technological know-how, whereas the products that are valuable and inimitable are the ones which make money.

It has been a while since Nokia, the handset device leader of the late 1990’s, left the handheld communication device industry and switched to the telecommunications industry. Nokia started manufacturing equipment used to power cellphone networks for major carriers such as AT&T, Verizon and this has become the largest source of revenue for them since the Apple-led smartphone revolution. Recently Nokia and Alcatel-Lucent (France) have entered talks of a merger, which will bring up many questions on market power, rivalry, synergies and possibilities for these two firms. One abstract question not many seem to ask is; will this merger help unravel the correlation between industrial organization and innovative processes asked by one of the greatest Economists of all time, Joseph Schumpeter? Consolidation and an oligopoly-structured competition with a higher HHI may spice things up or calm things down in terms of R&D, which is still debated in IO…

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