Now here’s news that is going to leave everybody shell-shocked…..to say the least!! Microsoft in an astonishing turn of events have taken over Finnish cellular giants Nokia in a $7.2bn deal (5.44bn Euros). Microsoft confirmed that Nokia would grant the Washington state-based software giant a 10-year non-exclusive license to its patents, while the Finnish company would itself focus entirely on network infrastructure and services, while ceasing to exist as a phone manufacturers.
The two companies said the deal would “redefine the boundaries of mobility,” and would be completed by early 2014. About 32,000 employees would switch to Microsoft, if the acquisition is approved by regulators. Nokia still remains the world’s second largest mobile phone manufacturers behind Samsung but have fared poorly in the “Smartphone” category. This seems to be quite a smart move on the part of Microsoft as currently the usage of phones having the Windows Phone OS from vendors is fading at a rapid pace.
Nokia which had around 40% mobile market share in 2007, dropped down to 15% by 2013 and have a meager share of just 3% in the Smartphone genre with Android playing a major role largely due to its 75% share in the global Smartphone market. Microsoft will also take into ownership Nokia’s Asha range of feature phones. Patent-wise, Microsoft gets 10-year non-exclusive license to its Finnish partner’s library of ideas and “reciprocal rights” to use Microsoft patents within its HERE mapping services. While Microsoft will be able to use the Nokia branding on its products, the Finnish company will now focus on its mapping, infrastructure and advanced tech arms.
Here is what former Nokia CEO Steve Ballmer had to say: “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.”
Would the new found acquisition by Microsoft finally be the key to Nokia’s resurgence? We’ll soon find out!!