Microsoft to buy Nokia's cell phone business

[Syt]

http://www.bbc.co.uk/news/business-23940171

Microsoft to buy Nokia's mobile phone unit

Microsoft has agreed a deal to buy Nokia's mobile phone business for 5.4bn euros ($7.2bn; £4.6bn).

Nokia will also license its patents and mapping services to Microsoft.

The companies said that the deal would be finalised in early 2014, when about 32,000 Nokia employees will transfer to Microsoft.

While Nokia has struggled against competition from Samsung and Apple, Microsoft has been criticised for being slow into the mobile market.

"It's a bold step into the future - a win-win for employees, shareholders and consumers of both companies," Steve Ballmer, chief executive of Microsoft, said in a statement.

The transaction is subject to approval by Nokia shareholders and regulators.
Priority move

Microsoft, one of the biggest names in the technology sector, has struggled as consumers have shunned traditional PCs and laptops in favour of smartphones and tablet PCs.

Critics say the firm has been too slow to respond to the booming market for mobile devices. It launched its Surface tablet PCs last year, but sales of the devices have been relatively slow.

Analysts said that the company wanted to make sure that it got its strategy right in the mobile phone market.

"Mobile is an area of tremendous potential but it has been one of weakness for Microsoft," Manoj Menon, managing director of consulting firm Frost & Sullivan, told the BBC.

"Clearly the number one priority for the company is to get its mobile strategy right. From a strategy point of view, this deal is the perfect step, The only question is how well they can execute this plan."

Ben Wood, an analyst at telecoms consultancy CCS Insight, said: "It's a necessary gamble by Microsoft to break into mobile, but given its complete reliance on Nokia for Windows Phone devices and the competitive position of Apple and Google with rival phone platforms an understandable move.

"It completely reshapes Microsoft's business pushing it firmly into hardware. But it also raises big questions about the sustainability of other firms, including HTC and Blackberry, remaining pure-play phone makers," he added.

'Tighter integration'

Nokia was once a leader in mobile phones, but the firm's sales fell 24% in the three months to the end of June from a year earlier.

It sold 53.7 million mobile phones during the quarter, down 27% on last year.

However, sales of its new Lumia phones, which run a Microsoft operating system, rose during the period.

Mr Menon said that the deal between the two companies would help to bring the "hardware closer to the operating system and achieve a tighter integration".

"This should help Microsoft make a more effective strategy to compete in the mobile sphere," he said.

Microsoft has also agreed a 10-year licensing arrangement with Nokia to use the Nokia brand on current mobile phone products.

[Barrister]

Nokia's mobile phone unit?  What's left of Nokia besides mobile phones?

Very odd to make a multi-billion dollar acquisition like this within weeks of Balmer announcing his retirement.

[garbon]

Looks like software/security/online/mobile solutions is the other main division.

[merithyn]

I just bought a Nokia Windows phone yesterday.

[Barrister]

I just bought a Nokia Windows phone yesterday.

[jimmy olsen]

Nokia's mobile phone unit?  What's left of Nokia besides mobile phones?

Very odd to make a multi-billion dollar acquisition like this within weeks of Balmer announcing his retirement.

I believe they have quite a lot of valuable patents.

[Bluebook]

Nokia's mobile phone unit?  What's left of Nokia besides mobile phones?

Network hardware. That is where Ericsson went, and that is where the real money is.

[The Larch]

Very odd to make a multi-billion dollar acquisition like this within weeks of Balmer announcing his retirement.

Nokia's current CEO is a former Microsoft executive and now one of the favourites to replace Balmer as Microsoft CEO. This was probably years in the making.

[The Brain]

Nokia's mobile phone unit?  What's left of Nokia besides mobile phones?

They should have stayed in rubber. I love my Nokia boots.

[Syt]

They should go into car manufacturing and advertise: "No Kia."

[MadBurgerMaker]

I just bought a Nokia Windows phone yesterday.

My wife loves hers (I don't find it bad at all myself), although it isn't the newest one.  A Lumia 920, I believe. 

Did you get one of the new 41mp camera ones?

[merithyn]

I just bought a Nokia Windows phone yesterday.

My wife loves hers (I don't find it bad at all myself), although it isn't the newest one.  A Lumia 920, I believe. 

Did you get one of the new 41mp camera ones?

A cheap Lumia 520 to hold me over until time for an upgrade in April. I wasn't pleased at first, but the more I play with it, the more I like it. Not a whole lot different from my iPhone. It was a pain for getting apps, but now that I've figured that bit out, it's a fairly nice new toy.

I'd thought to get a Galaxy Action in April, but now I'm not so sure. I love the water-resistence of the Action, but I'm kind of hoping there will be other options by then.

[MadImmortalMan]

I have a Lumia. I like it fine. I wish it had a keyboard, but hey you can't have everything. The camera is quite good.


Keep in mind that Nokia's current CEO is a dude who left Microsoft to go there. It very well may have been the plan all along to see what stuff they could strip away from the Nokia machine before letting the husk die. Or you know, preparing a merger.