Yesterday (2nd September 2013) Microsoft and Nokia announced
a long expected acquisition of Nokia’s Devices and Services Unit with some access to Nokia’s mapping service and patents thrown in for good measure. The total acquisition price stands at some EUR 5.44 billion making it a sizeable investment from the software giant. Ultimately this move will allow Microsoft to unite its Windows 8 Phone software with it’s main hardware partner Nokia with an aim of offering a more complete end-to-end user experience similar to big industry player Apple inc.
The deal also includes well known Lumia and Asha brands as well as Nokia’s long term licence with Qualcomm for chip technology both of which will be valuable tools in Microsofts aim of securing its place as the third major player in the mobile phone market behind Android and IOS. Microsoft will also be expected to take 32,000 Nokia employees in the acquisition and some EUR 14.9 Billion in operations or 50% of Nokia’s net sales for 2012 in the deal.
Microsoft purchases Nokia in €5.44 billion deal
Extract from the announcement
– Microsoft purchases Nokia;
“Building on the partnership with Nokia announced in February 2011 and the increasing success of Nokia’s Lumia smartphones, Microsoft aims to accelerate the growth of its share and profit in mobile devices through faster innovation, increased synergies, and unified branding and marketing. For Nokia, this transaction is expected to be significantly accretive to earnings, strengthen its financial position, and provide a solid basis for future investment in its continuing businesses.
“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,” said Steve Ballmer, Microsoft chief executive officer. “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.”
It’s still debatable whether this move will secure Microsoft as the third runner in the lucrative mobile phone market but what’s for sure is their intentions are clear, this image perhaps says more about the motives than anything else.
Image Credit – Why the Nokia/Microsoft deal is a big thing – Baekdal