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Microsoft to Buy Nokia Devices and Services Business for Nearly $5 Billion; Deal Expected to Close Early 2014

Category: Mobile
Posted: 12:29AM

In a rather surprising turn of events, Microsoft has purchased Nokia's devices and services business for nearly $5 billion, with another $2.18 billion for all of Nokia's patents. It was just a couple of years ago when Nokia announced a partnership with Microsoft to really get Windows Phone 7 off the ground, and eventually became the largest Windows Phone manufacturer. Now the two are forever joined, with the deal expected to be approved in the early part of next year. Microsoft hopes the deal will further solidify and strengthen its smartphone marketshare, with CEO Steve Ballmer saying:

It's a bold step into the future - a win-win for employees, shareholders and consumers of both companies. Bringing these great teams together will accelerate Microsoft's share and profits in phones, and strengthen the overall opportunities for both Microsoft and our partners across our entire family of devices and services.

A staggering 32,000 employees are going to transistion to Microsoft, with 4,700 in Finland and another 18,300 associated with product manufacturing. Microsoft is also taking control of Nokia's Asha line of feature phones, so this deal doesn't affect just the Windows Phone aspect. If you're wondering about all those patents, well Microsoft is receiving a ten-year non-exclusive license to all of Nokia's patents, along with "reciprocating rights" to use its own patents in Nokia's HERE mapping service. The Nokia logo is still going to appear on all future products, however the company is now going to be focused on the HERE maps as well as network infrastructure and technology.

Current Nokia CEO Stephen Elop is stepping down and will assume the role of Executive Vice President of Devices & Services to avoid any conflict of interest. Nokia's chairman of the board, Risto Siilasmaa, is taking on the role of interim CEO while the search is on for Elop's replacement. Executive VP of Design Marko Ahtisaari is planning to step down on November 1, with a departure date of November 30 so he can become an entrepreneur. Nokia executives Jo Harlow, Chris Weber, Juha Putkiranta, and Timo Toikkanen are expected to follow Elop to Microsoft.

Sources: Microsoft and Nokia

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