Microsoft to acquire Nokia mobile devices business for 5.44 billion Euros

Nokia CEO Stephen Elop
Nokia CEO Stephen Elop

A few hours ago it was announced that Microsoft will acquire the Nokia Devices & Services division, which is the one that manages the mobile business, for 3.79 billion Euros. The Redmond company will also pay 1.65 billion Euros for the license to use a number of Nokia patents for a total of 5.44 billion Euros (about $7.2 billion or £4.6 billion) which will be paid in cash.

About two and a half years ago Microsoft and Nokia signed a commercial agreement for the adoption of the operating system Windows Phone on the Lumia smartphones. Since then the relationship between the two companies had become tighter and tighter and more and more people were expecting an acquisition, now arrived.

Nokia will retain its ownership of its brand but Microsoft will acquire the Lumia and Asha brands. Microsoft will also have a license to use the HERE platform, the former Nokia Maps, and Nokia will have the license for the use of Microsoft patents on the technologies utilizing the HERE services.

About 32,000 Nokia employees will go to work for Microsoft including several managers, starting with the CEO Stephen Elop (photo ©luca.sartoni). In his case it’s a return since he already worked for the Redmond company between 2008 and 2010 as head of the division that among other things manages Office.

When Stephen Elop moved to Nokia, many started expecting that the two companies made some kind of deal, predictions that got confirmed. On various occasions, someone commented that he had never really stopped working for Microsoft as Nokia’s policy in the field of mobile devices has become more and more Microsoft-centric.

What’s going to happen now? As always in these cases, the statements in the press release are of great satisfaction for the agreement reached and of great ambitions for the future of Microsoft in the field of mobile devices, but what’s the actual future for the company? Nokia has immediately gained more than 40% in the Finnish stock market and the amount of money that will earn with this deal is huge so maybe it’s the one that made the real deal.

Nokia used to be a leader in the smartphone field but was unable to counter the rise of the iPhones. Other rivals have focused primarily on Android, some with great success, while Nokia has partnered with Microsoft to use an operating system that has a marginal share in the field of mobile devices.

A few days ago Microsoft CEO Steve Ballmer announced that he will retire so it’s possible that his successor will be to the one who’ll manage the development of new mobile devices, smartphones and tablets. Someone already sees Stephen Elop as a candidate. In any case, Microsoft will still face strong competitors so it’s that this deal won’t really change the situation.

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