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

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. 


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114 Comments

1. Yubnub

Posts: 100; Member since: May 23, 2013

WOW! go microsoft I guess...

43. AnTuTu

Posts: 1613; Member since: Oct 14, 2012

Great step forward. But does Nokia worth less than Skype??? That's my only concern

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..;(

61. Commentator

Posts: 3723; Member since: Aug 16, 2011

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

66. Commentator

Posts: 3723; Member since: Aug 16, 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...

68. asingha94

Posts: 295; Member since: Apr 08, 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.

71. asingha94

Posts: 295; Member since: Apr 08, 2012

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

87. blkjack

Posts: 17; Member since: Aug 16, 2013

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

98. asingha94

Posts: 295; Member since: Apr 08, 2012

I have a 920!!

110. veer.d

Posts: 89; Member since: Jul 12, 2013

elop break the millions of hearts

2. Yummy

Posts: 117; Member since: Mar 28, 2012

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

7. protozeloz

Posts: 5396; Member since: Sep 16, 2010

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

11. Commentator

Posts: 3723; Member since: Aug 16, 2011

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

17. protozeloz

Posts: 5396; Member since: Sep 16, 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

23. Commentator

Posts: 3723; Member since: Aug 16, 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.

28. protozeloz

Posts: 5396; Member since: Sep 16, 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...

35. Commentator

Posts: 3723; Member since: Aug 16, 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/

40. protozeloz

Posts: 5396; Member since: Sep 16, 2010

That's quite handy! Thanks

46. Commentator

Posts: 3723; Member since: Aug 16, 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.

99. -box-

Posts: 3991; Member since: Jan 04, 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.

100. Commentator

Posts: 3723; Member since: Aug 16, 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!

12. Commentator

Posts: 3723; Member since: Aug 16, 2011

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

3. Kishin

Posts: 706; Member since: May 30, 2013

Okay ;(

4. protozeloz

Posts: 5396; Member since: Sep 16, 2010

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

109. lalalaman

Posts: 638; Member since: Aug 19, 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

5. ricethief

Posts: 8; Member since: Jul 17, 2012

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

8. protozeloz

Posts: 5396; Member since: Sep 16, 2010

That was obvious from the very beginning

6. Commentator

Posts: 3723; Member since: Aug 16, 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.

9. a_merryman

Posts: 749; Member since: Dec 14, 2011

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

10. eman99

Posts: 410; Member since: Aug 03, 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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