Microsoft purchase Nokia's Device & Services division for €5.44 billion.
Back in June we reported that Microsoft almost bought Nokia's mobile division with the deal falling through at the last minute. The acquisition had been on the cards ever since Nokia choose to use Microsoft's Windows Phone platform on it's smartphones in 2011. Well now it's finally happened... Microsoft have bought Nokia's mobile division.
Microsoft have paid €5.44 billion for the Nokia's mobile division and have a 10 year agreement to use Nokia's brand, licenses and mobile patents. Nokia themselves will continue to own and maintain the Nokia brand - which is important to employees and shareholders at the Finnish giant.
The market has reacted positively to the news with Nokia shares rising 45 per cent after news of the acquisition broke. That's not surprising because Microsoft's backing pretty much guarantees Nokia's survival - which hasn't been certain in recent times as they struggled to compete with the likes of Samsung, Apple and Sony.
What does it mean for Nokia and their Lumia smartphones ?
As soon as the purchase is complete Nokia's employees (over 30,000 of them) will be effectively become Microsoft employees. There is bound to be some reorganisation and changes at the top of Nokia's mobile division have already been hinted. We're likely to learn more on the matter when Nokia hold an "investor" call later today.
Nokia are now going to focus on 3 major areas : NSN (network infrastructure and services), HERE (mapping and location services) and Advanced Technologies. However, fear not for Nokia smartphones will continue to be produced and to the average consumer nothing will appear to have changed !
Infact, things could even improve for owners of Lumia smartphones. An even closer collaboration between Nokia and Microsoft could have benefits. For example, updates to the operating system might roll-out faster and Nokia smartphones could have exclusive software features and applications.
Will Microsoft launch their own smartphones ?
As part of the agreement Microsoft have effectively opened up the possibility to launch their own branded smartphones - using Nokia's existing licenses and patents. The tech-giant has already shown their interest in the hardware market with their launch of the Microsoft Surface tablets.
Google have already shown it's possible to successfully enter the hardware market and Microsoft will be hoping to replicate their success. We expect Microsoft to launch a competitively priced smartphone in the next year , which will run on the Windows Phone platform and utilise Nokia's mobile technology and expertise.
It'll be interesting to see how things develop over the coming months. We think it's a good move for both parties because it guarantees Nokia's future, will accelerate the growth of Windows Phone and also enables Microsoft to enter the hardware market.
By Simon Thomas on 03rd September, 2013