There’s an interesting rumour going around some analyst types that made its way into the CommsDay mailbox last night. It suggests that Apple is to buy Nokia Siemens Networks.

Now I am not sure whether or not this rumour is based on any real indication of expressed interest on behalf of the world’s most valuable tech company or if it is merely based on some imaginative and speculative matchmaking, but I suspect the latter!

After all, Apple has currency to burn. Its market capitalization isn’t far off US$250 billion and more than a few US stock pundits think that its stock has some way to go. Combine this stock currency with a cool US$25 billion in cash and a sales trajectory that is literally adding tens of billions to cashflow annually, and it’s clear that Apple could stomach a major acquisition.

Reports also keep on filtering through that the shareholders of NSN—namely Siemens and Nokia—have their eyes on other challenges and wouldn’t mind offloading the firm. Of course these reports have been floating around for three years, but the fact remains that NSN is struggling to return substantial profits. Its annual sales are around the US$12-14 billion mark currently and are reasonably flat. Again there is no question that Apple could afford to buy and absorb such an operation.

The next question would be why? Well my rumour-spreading friend put it down to one factor: Apple’s legendary desire for control. We saw it with the Mac computer where, for many years, Apple kept a tight leash on both the operating system and the retail ecosystem that supported its products. We saw it again with the iPod and iPhone, with home-grown apps and iTunes stores that keep as much of the revenue from its hardware on the Apple bottom line as is possible. The iPad, with its app store-driven ecosystem, perpetuates this.

But Apple has had some problems of late—obviously at the supplier end with delays in its white-cased iPhones and the PR backlash created by suicides at supplier Foxconn’s facilities. But it’s probably the recent issues with the performance of the iPhone itself that have got minds thinking at Apple. First there were the problems with the software that depicts signal strength on the phones, then there were the well-publicised defects in antenna design that caused phones to drop out if held a certain way.

Apple CEO Steve Jobs’ attempts to suggest that these issues were endemic to all smartphones were quickly met with technically literate denials from its competitors, as well as off-the-record reports from inside the Apple camp suggesting that its phones were subject to less-than-ideal testing procedures ahead of their release. Indeed the indications are that when marketing and design considerations at Apple clash with networking and engineering considerations, the former prevail.

So how would a company with a legendary “control” fetish react to such a problem? Why not take control of a networking and engineering company that would allow it to match some of the advantages held by competitors such as Huawei, Ericsson and ZTE? Not only would it probably enable an improved product development process, but it would allow Apple to directly influence the networking technology decisions and deployments made by scores of the world’s leading cellular operators—particularly key for the iPhone, iPad and any future Apple products as we move into the 100Mbps LTE age.

Apple would have direct and personal relationships with network decision makers at the likes of Verizon, AT&T, KDDI of Japan, Vodafone, Telefonica, Telenor and others.

Indeed, NSN now performs so much network outsourcing work for carriers that Apple would gain an instant insight into carrier culture, one it currently lacks.

Of course there are plenty of reasons for Apple not to buy NSN. One significant factor would be the inherently lower margins on offer from a move into the network supply business, which would definitely act as a drag on Apple’s revenue and profit trajectory.

Another might be the lack of a willing seller. While news reports over the years have suggested Siemens might like to exit the business, it is not obvious that Nokia would sell its 50% stake in NSN to a direct competitor in the handset market that is virtually eating its lunch!

Likewise, NSN doesn’t act like a company waiting for a buyer to come along—after all it has been on the acquisition trail, having just picked up Motorola’s wireless network business. And it has also been aggressive on the sales front, snaring a $US7 billion deal with US network upstart LightSquared last week.

Analyst wishful thinking or a real manoeuvre? Only time will tell but you read it here first!

Grahame Lynch