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Microsoft to buy Nokia's handset division for US$7.17 billion

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September 2, 2013

Risto Siilasmaa (left) who will become Nokia's interim CEO, with Steve Ballmer and Stephen...

Risto Siilasmaa (left) who will become Nokia's interim CEO, with Steve Ballmer and Stephen Elop (Photo: Nokia)

While we tend to concentrate on technology itself, not the machinations behind it, this piece of business news is too significant not to mention. Nokia has announced that it will sell "substantially all of its Devices & Services business and license its patents to Microsoft." The €5.44 billion (US$7.17 billion) deal is expected to be finalized in the first quarter of 2014 subject to approval by Nokia shareholders and regulatory approvals.

The deal will see some 32,000 Nokia employees transfer to Microsoft along with Nokia's CEO Stephen Elop and a number of other executives. Elop is seen also as a leading candidate to replace Microsoft CEO Steve Ballmer, who announced two weeks ago that he will step down within 12 months. Risto Siilasmaa will become Nokia's interim CEO.

Nokia has undergone a well documented slide from its market leading position in the mobile phone business in recent years. The two companies already have an established partnership in the smartphone space and, while it's not yet clear exactly what it will translate to at the store-counter, the acquisition is designed to give Microsoft a boost in the mobile device market where Apple and Android OS manufacturers dominate.

And what will become of Nokia? According to the company's statement it will focus on its three established businesses in network infrastructure and services, mapping and location services and technology development and licensing.

Source: Nokia

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10 Comments

Smart move by Nokia. Another dumb move by Ballmer.

JC
3rd September, 2013 @ 02:56 am PDT

I love Nokia devices but I wouldn't buy one because they don't run Android... why?

Kostadin Iliev
3rd September, 2013 @ 04:13 am PDT

Kostadin Lliev, probably because Microsoft probably had sign an agreement where they will only used only software from Microsoft. It is how they came to dominate computers by making hardware companies sign an agreement to only use software from Microsoft. IBM dropped OS/2 Warp because of these agreements. IBM was able to sue Microsoft succesfully because of these agreements, which is anti-competitive (IMO but some think it was just good business).

BigWarpGuy
3rd September, 2013 @ 05:47 am PDT

Again Microsoft is late .... this would have been a good idea a decade earlier.

anmufti
3rd September, 2013 @ 07:00 am PDT

Microsoft & Nokia at last singing "These Boots are for Walking". And why not because they are a strong pair join software and hardware consept to make some really new All in one+Something new, mathematically thinkig 1+1=3.

eskoinFinland
3rd September, 2013 @ 10:23 am PDT

Tie a rock to a rock and still sink.

Anybody remember that Microsoft "placed" Elop into Nokia as a Trojan horse a while ago? This was the plan all along if they couldn't win in the mobile business - and they sure didn't.

The train left the station a long time ago for these 2 laggards.

Texas_Hold-'em
3rd September, 2013 @ 10:49 am PDT

To quote Scot McNealy (for those who know the name) "Two rocks, tied together will float."

Alan Wells
3rd September, 2013 @ 04:13 pm PDT

Nokia did not use the Android platform for fear of rivals swamping and dominating the market like Samsung, which was true. But it forgot that consumers still see the Nokia brand as something more reliable and ' higher' or ' better' than others. It underestimated the fact that consumers would rush to the Android Nokia brand first, before any Samsung or HTC. Thus Nokia should have and still can join the Android bandwagon through its other divisions and a lot of people would snap them up immediately, knowing that they are well made.

If Microsoft had allowed inbuilt full ms office functionality in their phones I would have used Windows Phone.

Sadaf Dawar
3rd September, 2013 @ 04:23 pm PDT

Microsoft.... more money than brains.. Your too late.

S Michael
3rd September, 2013 @ 08:30 pm PDT

Microsoft should just give up on phones and tablets. Heed RIM's warning when they introduced their PlayBook: "Amateur hour is over."

Gadgeteer
4th September, 2013 @ 04:23 pm PDT
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