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Microsoft to acquire Nokia's Devices & Services for $7.17 billion

Posted: , by Michael H.

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Microsoft to acquire Nokia's Devices & Services for $7.17 billion
It has been rumored again and again since Microsoft and Nokia first partnered together to make Windows Phone devices, and now it has officially happened. Microsoft has agreed to purchase Nokia's Devices & Services unit, as well as license Nokia's patents in a deal that will be worth €5.44 billion (~$7.17 billion). Microsoft CEO Steve Ballmer called the move "a bold step into the future" for the company, and pointed to the Lumia 1020 as an example of what the companies have done together. 

According to the terms of deal, Microsoft will pay €3.79 billion (~$5 billion) to purchase "substantially all of Nokia's Devices & Services business", and will pay an additional €1.65 billion (~$2.17 billion) to license Nokia's patents, for a total cost of €5.44 billion (~$7.2 billion) in cash. Microsoft says it "will draw upon its overseas cash resources to fund the transaction"; and, that it expects the deal to close by Q1 of 2014, pending approval by the Nokia board and any potential regulatory investigations.

As part of the purchase, approximately 32,000 people are expected to transfer from Nokia to Microsoft, including 4,700 people in Finland and 18,300 employees "directly involved in manufacturing". As far as the top brass, Nokia CEO Stephen Elop; Executive Vice President, Smart Devices Jo Harlow; Executive Vice President, Operations Juha Putkiranta; Executive Vice President, Mobile Phones Timo Toikkanen; and, Executive Vice President, Sales and Marketing Chris Weber are all going to be moving to Microsoft. 

Steve Ballmer laid out these plans for integrating the top brass into Microsoft: Stephen Elop will lead Microsoft's Devices team, which will be expanded to include all of the employees coming over from Nokia. Current head of the Devices and Studios team, Julie Larson-Green, will continue as the leader of the team, but it seems she will focus on Xbox and Surface devices. 

Oddly, Ballmer says the plan is for Julie to join Elop's team, which makes it sound like Ms. Larson-Green just got bumped from being the head of the group. Another strange thing is that Ballmer makes it sound like the Surface team will be staying under the lead of Ms. Larson-Green, which would mean it is staying separate from the incoming Nokia design and engineering teams. The other top acquires will continue in their current positions: Jo Harlow will continue to lead the Smart Devices team, Timo Toikkanen will lead the Mobile Phones team, Stefan Pannenbecker will lead the Design team, and Juha Putkiranta will lead the integration effort on Nokia’s end. 

Microsoft will be acquiring all of the business and design teams behind the Lumia devices; and, of course, Microsoft will also be acquiring the Lumia brand name, as well as the Asha brand name, which has a lot of cache in the low-end market. The plan is to integrate global marketing quickly, because Ballmer wants to have a "unified brand and advertising strategy as soon as possible", which would seem to mean that pretty soon you'll be seeing Microsoft Lumia 1020 on store shelves. 

Microsoft will also be signed-on to Nokia's current long-term patent licensing agreements with Qualcomm and others. The terms of the patent licensing deal will give Microsoft "a 10-year non-exclusive license" to Nokia patents, and Nokia will get access to Microsoft patents for use in HERE products. HERE products look to be one of the three tent-poles of Nokia's business going forwards, along with the Nokia Siemens Networks, and Advanced Technologies, which is Nokia's licensing and development arm. 

Nokia will host a press conference later today, Tuesday, Sept. 3 at the Dipoli conference center in Espoo, Finland. 

+- Press Release

114 Comments
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posted on 02 Sep 2013, 22:41 13

1. Yubnub (Posts: 100; Member since: 23 May 2013)


WOW! go microsoft I guess...

posted on 02 Sep 2013, 23:11 13

43. AnTuTu (Posts: 1580; Member since: 14 Oct 2012)


Great step forward.

But does Nokia worth less than Skype??? That's my only concern

posted on 02 Sep 2013, 23:21 29

56. zoom007 (unregistered)


A very sad day in the history of cellphones. 7.2 billion is way to less..Microsoft and Elop raped this amazing company..;(

posted on 02 Sep 2013, 23:24

61. Commentator (Posts: 3709; Member since: 16 Aug 2011)


It's a great day for PhoneArena's advertisers... so there's always that to be happy about!

posted on 02 Sep 2013, 23:30

66. Commentator (Posts: 3709; Member since: 16 Aug 2011)


...unless the people who are angry about this psychologically extend that anger to the banner ads they see here for XFINITY HOME, HP's Labor Day Sale and the LG G2, in which case it's a terrible day for PhoneArena's advertisers...

...I mean, that big MICROSOFT SURFACE ad at the top of this page right now can't be helping to ease the pain...

posted on 02 Sep 2013, 23:31 7

68. asingha94 (Posts: 295; Member since: 08 Apr 2012)


Don't know whether it is good or bad for future.May be it will result faster update & more development on their platform.But Nokia is good standalone.Because it has the everything & MS is going to buy it.You lost my respect Elop.Fk u Elop & Screw Microsoft.

posted on 02 Sep 2013, 23:39 2

71. asingha94 (Posts: 295; Member since: 08 Apr 2012)


I will not buy a device if it is called Microsoft Lumia 1****!!!Will buy Android further!!

posted on 03 Sep 2013, 00:12

87. blkjack (Posts: 17; Member since: 16 Aug 2013)


Did you buy any Nokia Lumia's prior to Microsoft buying part of the company?

posted on 03 Sep 2013, 00:28

98. asingha94 (Posts: 295; Member since: 08 Apr 2012)


I have a 920!!

posted on 03 Sep 2013, 01:06 3

110. veer.d (Posts: 88; Member since: 12 Jul 2013)


elop break the millions of hearts

posted on 02 Sep 2013, 22:42 14

2. Yummy (Posts: 117; Member since: 28 Mar 2012)


I don't know how to respond to this...

posted on 02 Sep 2013, 22:45 20

7. protozeloz (Posts: 5396; Member since: 16 Sep 2010)


I was expecting this to happen, after all it was the whole reason Elop was working... MS got Nokia dirt cheap

posted on 02 Sep 2013, 22:47 1

11. Commentator (Posts: 3709; Member since: 16 Aug 2011)


Heck yeah they did. Nokia's market cap is twice what MS is paying. Granted, they're not acquiring the whole thing...

posted on 02 Sep 2013, 22:53

17. protozeloz (Posts: 5396; Member since: 16 Sep 2010)


You could say that, but they got the important parts... This deal could have rose 16b mark, unless Nokia's market share was not translating into funds directly, but that could be hard to prove

posted on 02 Sep 2013, 22:56

23. Commentator (Posts: 3709; Member since: 16 Aug 2011)


Well the guys who put the deal together know a heck of a lot more than you or I do about this, so if anyone can prove it it's them.

posted on 02 Sep 2013, 23:00

28. protozeloz (Posts: 5396; Member since: 16 Sep 2010)


True that lol Wonder if the details will come out sooner than later, but I got shocked at the price... Though anyone would have to cough up 20b for the whole thing.... Wonder what's left of Nokia...

posted on 02 Sep 2013, 23:06

35. Commentator (Posts: 3709; Member since: 16 Aug 2011)


I'd assume their feature-phones division and Nokia Siemens Network are left untouched.

Here's a handy-dandy chart of their corporate structure:

http://www.nokia.com/global/about-nokia/about-us/our-structure/

posted on 02 Sep 2013, 23:08

40. protozeloz (Posts: 5396; Member since: 16 Sep 2010)


That's quite handy! Thanks

posted on 02 Sep 2013, 23:13 1

46. Commentator (Posts: 3709; Member since: 16 Aug 2011)


Well, it looks like MS took their feature-phones too: "Microsoft will also be acquiring the Lumia brand name, as well as the Asha brand name, which is the more important name..."

The article now lists HERE, NSN, and Advanced Technologies as all that's left of Nokia.

posted on 03 Sep 2013, 00:32

99. -box- (Posts: 3991; Member since: 04 Jan 2012)


Read the whole Powerpoint (http://www.microsoft.com/en-us/news/download/press/2013/StrategicRationalePPTX.aspx ) or same info on PDF here:http://www.microsoft.com/en-us/news/Press/2013/Sep13/StrategicRationale.aspx

Basically they're acquiring the brand names, and will license the brand names to use on the feature phones for the next 10 years, with the option to convert the 10-year license to a perpetual license. (page 23)

I reeeeeeeally hope we're not seeing the end of Nokia as a phone brand. I'd much rather see them be like Skype, where it keeps its original name but is an integrated service.

posted on 03 Sep 2013, 00:33

100. Commentator (Posts: 3709; Member since: 16 Aug 2011)


Without a doubt that's what they'll do. MS isn't stupid, they know the importance of the Nokia brand.

Woo! Comment 100! ... Which means that so far my 19 comments have made up 19% of those posted here!

posted on 02 Sep 2013, 22:49 1

12. Commentator (Posts: 3709; Member since: 16 Aug 2011)


All I know is we're in for a fun night of comments!

posted on 02 Sep 2013, 22:43

3. Kishin (Posts: 705; Member since: 30 May 2013)


Okay ;(

posted on 02 Sep 2013, 22:43 12

4. protozeloz (Posts: 5396; Member since: 16 Sep 2010)


Ha i knew elop was a Trojan horse, Nokia got sold for half the price Motorola did despite being in a better position

posted on 03 Sep 2013, 01:02 1

109. lalalaman (Posts: 631; Member since: 19 Aug 2013)


It is not totally sold I guess....assets will nt b sold sothe price is low

Besides moto is doing good with os maker Google so may Nokia with ms

posted on 02 Sep 2013, 22:44 16

5. ricethief (Posts: 8; Member since: 17 Jul 2012)


I think Stephen Elop at Nokia has been a trojan horse for MS.

posted on 02 Sep 2013, 22:46 16

8. protozeloz (Posts: 5396; Member since: 16 Sep 2010)


That was obvious from the very beginning

posted on 02 Sep 2013, 22:44

6. Commentator (Posts: 3709; Member since: 16 Aug 2011)


One of Ballmer's last acts as CEO may end up being his most memorable. Will Elop be his successor?

It'll be interesting to see how Samsung and HTC respond to this, given their (relatively limited) investment in WP.

posted on 02 Sep 2013, 22:46

9. a_merryman (Posts: 749; Member since: 14 Dec 2011)


Wow, it's about time considering the relationship they've had the past couple years. But it still surprised me.

posted on 02 Sep 2013, 22:47 5

10. eman99 (Posts: 380; Member since: 03 Aug 2010)


not good very sad news damn you google you should have purchased well made nokia handsets, imagine android on them

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