In a completely surprise move, Microsoft has announced that it will acquire Nokia’s devices, services and patents for the princely sum of $7.2 billion. This includes rights to the Lumia brand as well as the HERE Mapping services and more. It’s no secret that Nokia Lumia devices are the most well received and highest selling Windows Phone devices, and with this acquisition, Microsoft now has a mobile devices arm of its own. According to them, working together more closely should bring about better innovation and speed up growth. Read on for the full report!
What does Microsoft get and when will the deal be complete?
The complete acquisition should be done by early 2014, after regulatory and shareholder/investor approval. So what does Microsoft get basically? Other than the Lumia brand, mapping services, manufacturing units, and Nokia’s patent armory it will also own the Asha range of phones. Nokia’s patents will be a particularly big boost, since the Finnish firm owns rights to many smartphone related patents.
In a presentation, Microsoft has detailed its rationale behind this move and has set some goals for the future. It aims to gain at least 15% market share by 2018 and will continue to support other mobile OSes as it does presently, of course with priority being given to its own Windows Phone. Around 32,000 people will make the move to Microsoft, including the senior management of Nokia including Jo Harlow, Chris Weber and Stephen Elop. For now Stephen Elop has stepped down as CEO of Nokia, and will join Microsoft by early 2014. Elop is also a frontrunner to succeed Steve Ballmer as the CEO of Microsoft.
What happens to Nokia and what about other manufacturers?
Even though Microsoft has access to most of Nokia’s services and patents, Nokia still has those divisions under them and will continue to focus on further development. While it’s looking to become the “leading independent location cloud platform company, offering mapping and location services across different screens and operating systems”, there is another lesser known and advertised but very important division Nokia can now focus on. After recently buying out the full stake in Nokia Siemens Network, the Finnish firm will now develop advanced networks and infrastructures, in addition to current LTE networks. In other words, it will now focus on a lot of the backend technologies.
Microsoft will continue to license Windows Phone 8 for other OEMs, although there hasn’t been any reactions from their senior management yet. Any and all services that are available on other platforms like iOS and Android will also continue to be supported once the merger is complete.
Nokia has on the hardware side of things and Microsoft, on the software side. This merger will probably bring out the best of both worlds, now that all processes are streamlined and internally coordinated. It will also give Microsoft the ability to bring more refined and unified experiences to its Windows Phone devices. Do let us know what you think of this big merger, any comments are welcome!