Now according to a new report from AllThingsD, Microsoft has just announced that it will be purchasing Nokia’s devices and services business for a cool $7.17 billion.
Before you go about thinking that Microsoft is purchasing all of Nokia, no it’s not. It’s only purchasing almost all of Nokia’s device and service areas, as well as licensing the phone maker’s patents and mapping know-how.
This is a big break for Microsoft as Nokia has been in partnership with the Redmond company for the longest time. Nokia is been one of the most supporting companies that is trying its hardest to push for Windows Phone to do well in the current vicious market.
Microsoft has agreed to pay Nokia 3.79 billion euros ($4.99 billion) for the devices and services business, as well as 1.65 billion euros ($2.18 billion) for the patents area. Soon to retire CEO Steve Balmer states that this deal is “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.”
With the purchase of Nokia, Microsoft will also be taking over thousands of employees and integrating them into the Microsoft world. Currently, 32,000 people will transfer across Microsoft, which includes 4,700 people in Finland and 18,300 employees directly involved in product manufacture process. Microsoft will also take into ownership Nokia’s Asha range of feature phones.
Microsoft is hoping to gain a lot out of this deal. While Nokia has supported Microsoft a lot in the recent years, Nokia itself has not done so well in the market. The once great smartphone maker is now one of the struggling companies to stay alive. BlackBerry is currently also struggling in the smartphone market and cannot hold on against the likes of Apple and Samsung. Microsoft on the other hand is slowly gaining market share, and the company hopes that it will start to gain even more traction with this deal. Currently, the deal is approved from Microsoft’s end, however the deal has yet to be closed from Nokia’s end. Both sides expect the deal to be finished by early 2014.
What are your thoughts about this? Did Microsoft make the right call by purchasing Nokia’s devices and services business?