Microsoft buys Nokia’s devices unit in a $7.2 billion bid


Considering the fact that  Nokia was the only OEM that was still holding the Windows Mobile torch, it will come as no surprise that  Microsoft has purchased it’s Devices and Services unit, bringing the Lumia lineup under the Redmond ceiling. This long awaited purchase will give Microsoft the element it has been missing for a long time  — tight integration of the Windows phone ecosystem. Over 32,000 people are expected to transfer from Nokia to Microsoft, including 18,300 that are “directly involved in manufacturing.” The deal is expected to close in the first quarter of 2014, Microsoft is expected to dish 3.79billion Euros for Nokia’s business, plus another 1.65 billion Euros for its portfolio of patents. This is a total of 5.44 billion Euro an amount less than what Microsoft spent in 2011 in the for Skype  acquisition.

Early this year in June, there were rumors of this acquisition, and it has turned out to be true after all. The unity of the two tech giants is what the outgoing Microsoft CEO Steve Ballmer has called “a bold step into the future. Now is the time to build on this momentum and accelerate our share and profits in phones,” he wrote.

Asha to compliment Windows Phone

Let’s not forget that Nokia has a low end Asha brand to maintain which of course Microsoft has acquired as well— the good news is that it will continue to license the Nokia brand. But Asha gives Microsoft a far larger footprint for Windows Phone, and access to millions of customers in developing continents like here in Africa that it plans to use as a”complement to Windows Phone.” Microsoft’s licensing deal for the Nokia brand doesn’t include future Lumias — Nokia as a Smartphone brand is effectively dead. Nokia’s brand dead

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We all know that Windows phones 8 is licensed to other OEMs like HTC , Samsung and so those who were wondering what would  become of these other OEMs, worry not, as EVP of Operating Systems Terry Myersonwas careful to note that  Microsoft’s purchase doesn’t come with nepotism. Just a  Google treats Motorola, Myerson promised every partner would be treated the same.

Let’s not forget that Nokia is a telecom infrastructure vendor as one of its three core technologies under NSN, so Nokia will focus on these. The other two include HERE (its maps and location-based services); and Advanced Technologies (a licensing and development arm). Microsoft expected to pay Nokia for a four-year license of the HERE services, bringing the new company more revenue and stability than it had previously. This move has also shrunk Nokia in terms of numbers.

Nokia CEO Stephen Elop  back to Microsoft’s head of device team

In what looks like a demotion, Nokia CEO Stephen Elop is stepping aside; he’s now leading Microsoft’sDevices team according to the agreement. The exact scope of Elop’s role isn’t exactly clear, and with a soon-to-be-vacant CEO seat we expect plenty of rumors to fly as the acquisition deal closes.