Microsoft to Buy Nokia Phones Division, Make Its Own Phones

September 4, 2013 8:38 am 0 comments Views: 346

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Microsoft has announced what some have been predicting for over two years now. The software giant has reached an agreement to purchase Nokia’s devices and services unit, which will put Microsoft in charge of making its own first-party Windows Phone devices. The wheels are already turning to shepherd the deal through the regulatory and shareholder gauntlet over the coming months.
Microsoft will pay €3.79 billion for Nokia’s mobile device business, plus an additional €1.65 billion for its portfolio of patents. That works out to a total of about $7.2 billion. As part of the deal, Nokia’s CEO Stephen Elop (a Microsoft alum) will be stepping down as CEO of the Finnish phone maker in order to lead Microsoft’s Devices team. That puts him in an interesting position as Steve Ballmer is planning for his exit. Wild speculation that Elop may be the next CEO of Microsoft could be spot on.
This is obviously a big step for Windows Phone, which has failed to gain traction even after years of improvements and big advertising campaigns. 32,000 Nokia workers are expected to come over in the deal, and that includes 18,300 who have direct involvement with manufacturing. Having the Nokia manufacturing outfit in-house could allow Microsoft to iterate devices in a more consistent way with more unified software and hardware.
Unlike Google, Microsoft doesn’t have a dedicated assortment of OEMs making Windows Phone devices. HTC and Samsung release Windows Phone devices on occasion, but seem disinterested, preferring to spend most of their time and resources on Android. As such, Microsoft doesn’t really have to worry about competing against itself.
The deal is expected to be complete by the first quarter of 2014. Windows Phone is going to get at least one more chance to make some headway.

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