Gadgets

Microsoft, To Acquire Nokia’s Phone Business for $7.2 B

Microsoft Redmond Campus | Wikipedia

Microsoft Redmond Campus | Wikipedia

A pair of statement was released early Tuesday, announcing that Microsoft will acquire Nokia’s Device and Services Business. In addition, the Windows Phone maker will license the Finnish firm’s patents and mapping assets, including HERE mapping service.

Microsoft is set to pay about $5 billion to own Nokia’s Device and Services Business when the deal closes in the first quarter of 2014. Meanwhile, certain patents will be licensed for an additional $2.2 billion.

It was also reported that Stephen Elop, Nokia’s current CEO, will step down to become Microsoft’s “Nokia Executive Vice President of Devices and Services”. Outgoing Chief Executive Steve Ballmer stated:

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. In addition to their innovation and strength in phones at all price points, Nokia brings proven capability and talent in critical areas such as hardware design and engineering, supply chain and manufacturing management, and hardware sales, marketing and distribution.

The 10-year licensing agreement will enable Microsoft to use the Nokia moniker on current cellular devices. It will also give them a substantial boost in terms of keeping the Windows Phone platform relevant against dominant smartphone players, Apple and Google.

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