Microsoft set to buy Nokia’s Devices Unit for $7.2 Billion
Just recently Microsoft Corp. (MSFT) agreed to buy Nokia’s handset units and license its patents for 5.44 billion euros ($7.2 billion), seeking to revive two smartphone businesses that have struggled for a half-decade to gain share against Apple Inc. and Google Inc. This move now unites Windows Phone 8 with its biggest hardware supporter. That latter division accounts for hundreds of millions of mobile phones sold every year around the world, with 53.7 million units sold in the second quarter of 2013 alone and also incorporates the Asha brand of phones.
Microsoft can now offer integrated mobile it’s been looking for with Surface and other devices. When the deal closes in the first quarter of 2014, Microsoft will be set back €3.79 billion for Nokia’s business, plus another €1.65 billion back for its portfolio of patents, Of course, that kind of acquisition doesn’t come cheap.
As part of the agreement, Nokia CEO and President Stephen Elop is stepping aside; as of today he’s Nokia’s executive vice president of devices & services reporting to interim CEO Risto Siilasmaa, previously chairman of Nokia’s Board of Directors. However, Stephen won’t join Microsoft until after the acquisition is approved and the deal is expected to be finalised in the first quarter of 2014, provided Nokia’s shareholders and industry regulators approve.
According to the Verge Magazine, the deal is said to be the largest for a wireless device maker after Google purchase of Motorola’s handset unit in 2012. This deal including the payment to license Nokia’s patents is its second-biggest behind the $8.5 billion purchase of Internet telephone company Skype in 2011. Microsoft acquired the Lumia brand to use with smartphones, while it will license the Nokia brand to use with low-end phones for 10 years whilst we still wait for the new name for their smartphones.
Seems like the days for Nokia smartphone brand is over- tough but the company will be keep its mapping and location services unit, called Here, and its technology development and licensing division.
Microsoft set to buy Nokia’s Devices Unit for $7.2 Billion
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