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Microsoft to Buy Nokia's Device Business for Over $7 Billion

By - Source: MSFT | B 42 comments

Microsoft is paying billions of dollars for the Finnish company.

Microsoft has announced plans to purchase Nokia's phone business. The news was announced late Monday night and will see Microsoft purchase Nokia's Devices & Services business (including the Lumia brand and products) as well as license to use Nokia's patents for a total of €5.44 billion or $7.17 billion by today's conversion rates. Microsoft says it will draw on its overseas cash resources to fund the transaction, which is expected to close early next year provided it gets the go ahead from Nokia's shareholders and the usual regulatory bodies. Under the terms of Monday's acquisition agreement, 32,000 Nokia staff, including 4,700 from Finland, will transfer to Microsoft.

"Building on our successful partnership, we can now bring together the best of Microsoft’s software engineering with the best of Nokia’s product engineering, award-winning design, and global sales, marketing and manufacturing," said Nokia's Stephen Elop. "With this combination of talented people, we have the opportunity to accelerate the current momentum and cutting-edge innovation of both our smart devices and mobile phone products."

Though the news comes as a shock, it's not a total surprise. Back in May of 2011, there were rumors that Microsoft was to acquire Nokia's mobile division. Nokia had just bet the farm on Windows Phone having spent too long floundering in the smartphone space with its own software solution. The company's firm backing of Windows Phone just a few months previously, in February 2011, lent credence to the reports. However, a Nokia UK spokesperson scoffed at the rumors, labeling them 'inaccurate.'

The deal makes sense for Microsoft for a lot of reasons. One of the biggest ones is, obviously, the Lumia line of Windows Phone devices. Nokia has the most notable Windows Phone devices on the market. It's no surprise Microsoft would want to own the brand. Unfortunately, this doesn't rule out the possibility that other Windows Phone partners might decide there's no competing with Microsoft itself and throw in the towel.

Speaking in a blog post published last night, Microsoft CEO Steve Ballmer said the deal represented a 'bold step into the future' for Microsoft.

"For Microsoft as well, today is a bold step into the future, a huge leap forward on our journey of creating a family of devices and services that delight people and empower businesses of all sizes," he said. "Our partnership over the past two and a half years, which combined our respective strengths to build a new global mobile ecosystem, has created incredible results: award-winning phones and amazing services that have made Nokia Windows Phones the fastest-growing smartphones in the world."

Earlier this month, Ballmer announced his plans to retire from Microsoft within the year, so he won't be around to see how this one pans out. Instead, he'll be watching from the outside with the rest of us.

Follow Jane McEntegart @JaneMcEntegart. Follow us @tomshardware, on Facebook and on Google+.

Note: An earlier version of this story incorrectly stated that Microsoft had also purchased Nokia's patent portfolio. The story has been updated correct this error.

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Top Comments
  • 11 Hide
    back_by_demand , September 2, 2013 10:36 PM
    A phone company with true innovation, not just round corners and not much more than what they spent on Skype - good business
Other Comments
  • 7 Hide
    nekromobo , September 2, 2013 10:30 PM
    So Elop was the moleman everyone excepted him to be..
  • 0 Hide
    thomasch , September 2, 2013 10:36 PM
    So the camel has finally taken over the tent ! This was on card for a long time and saving grace for nokia. Cannot say the same for MS yet.
  • 11 Hide
    back_by_demand , September 2, 2013 10:36 PM
    A phone company with true innovation, not just round corners and not much more than what they spent on Skype - good business
  • 4 Hide
    jhansonxi , September 2, 2013 10:38 PM
    Not shocked. The Elopcalypse was foretold in the days of yore. Maybe AOL will be the next target so they can prop up Bing.
  • 3 Hide
    jhansonxi , September 2, 2013 10:48 PM
    I wonder what the chances of Elop replacing Ballmer are. Would that be an improvement?
  • -5 Hide
    nevilence , September 2, 2013 10:52 PM
    luckily i havent touched a nokia in years, so i am not upset, probably never touch another now though =P
  • 3 Hide
    de5_Roy , September 2, 2013 10:53 PM
    worst kept secret after elop went to nokia...
  • 1 Hide
    aggroboy , September 2, 2013 11:00 PM
    Nokia has a truckload of patents since the 2G days, Microsoft sic them on any mobile device competitor.
  • 3 Hide
    sivaseemakurthi , September 2, 2013 11:19 PM
    Seems more like Elop was 'sent' to Nokia than he joined Nokia.
  • -4 Hide
    _Brute_Force_ , September 2, 2013 11:24 PM
    drive it to the ground, then buy it dirt cheap.

    Good strategy.
  • -1 Hide
    ojas , September 2, 2013 11:39 PM
    Elop is next M$ CEO. I bet.
  • 0 Hide
    mariusmotea , September 2, 2013 11:39 PM
    Seems like Elop was working more for Microsoft than Nokia.
  • -1 Hide
    jimmysmitty , September 2, 2013 11:41 PM
    Quote:
    Facepalm. Here I was hoping MS would smarten up and focus on what they do well. Unless they make a line of phones that runs full Windows 8, I have no reason to ever bother with their mobile OS...


    Once Intel gets its Atoms CPUs to a decent place we will see that happen.

    Until then we will only get either a mobile OS or a ARM version of 8 since AMR while being highly efficient is not nearly as powerful as x86.
  • -2 Hide
    de5_Roy , September 2, 2013 11:43 PM
    if new atoms fail, the wintel alliance might break and a new ms+qualcomm alliance might begin (windragon?). or, if ms is really stupid, they might ally with nvidia *snicker*.
  • 5 Hide
    Aaron Briggs , September 3, 2013 12:03 AM
    Intel needs to hurry up and get faster better Atoms. I would love to see X86 OS's on phones.
  • 0 Hide
    azz156 , September 3, 2013 12:42 AM
    i wouldn't mind a x86 phone but to be honest arm has won that market. its the windows rt argument in reverse. what good is a x86 phone with no apps when i can get a arm phone that has millions. my prediction is a intel phone is going to be the windows rt of the phone world.
  • 0 Hide
    tomfreak , September 3, 2013 12:50 AM
    x86 windows NT phone is pretty deadly combo, this is especially true when all ur old apps from 10-20yrs ago work right out of the box. Now it is to wait if Intel actually can pull this off.

    WP8 is not a bad OS, but it certainly need x86 to push further.
  • -2 Hide
    mman74 , September 3, 2013 1:17 AM
    Basically they drove themselves into the ground by sticking with Windows. It's only fitting that they get bailed out by them - because that's exactly what this is. To think they were numero uno when Google virtually begged them to launch Android. Oh how the might have fallen!
  • -1 Hide
    azz156 , September 3, 2013 2:32 AM
    i wouldn't mind a x86 phone but to be honest arm has won that market. its the windows rt argument in reverse. what good is a x86 phone with no apps when i can get a arm phone that has millions. my prediction is a intel phone is going to be the windows rt of the phone world.
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