Microsoft has made a surprise announcement: it plans on buying Nokia’s phone business and license its patents for $7.2 billion. This latest Microsoft acquisition has become the biggest buzz yet in the mobile industry.
Nokia’s CEO Stephen Elop, a former Microsoft executive, will return to the company as a potential successor to current CEO Steve Ballmer, who will resign from Microsoft within the next 12 months. Elop will not be alone, though, as 32,000 Nokia employees will join Microsoft as part of the deal.
This Microsoft acquisition of Nokia’s phone business marks the end of 150-year-old Finnish company, which dominated the cellphone market back in the day. While Nokia remains one of Europe’s top technology brands, the likes of Apple and Samsung have pushed Nokia into irrelevancy in Asia and North America.
After the acquisition, Nokia would be left with its networks business, navigation service, and patent portfolio. It remains the world’s second biggest mobile phone maker behind Samsung, but Nokia is not among the top five when it comes to the more lucrative smartphone market.
Nokia was able to turn its downtrodden fortune around with its Windows Phone-powered Lumia series. The company even reported it earned a profit for the first time in two years, but it is not enough to make Apple and Samsung buckle on their knees.
The Microsoft acquisition of Nokia’s phone business, which is expected to close in the first quarter of 2014, would put the former deeply into the very competitive market, despite some investors telling Microsoft to stick to its business software and services instead.
Source: Reuters
Image source: REUTERS/ Dado Ruvic
