Nokia a brand which had always been struggling since the inception of android and i devices globally, took a different path than usual and teamed up with Microsoft in February 2011 to provide Windows Phone OS based mobiles, particularly through the Nokia Lumia series. The Lumia series has created a fan following in a different class, and has gone through a tough market struggle too, as despite of the Nokia Microsoft partnership, it couldn’t lure a greater part of the market.
The Finnish manufacturer has now been in news lately once again. Microsoft, as we are talking of, has now acquired the mobile devices and services department for USD 7.18 Billion, which translates to 5.44 billion Euros/ 4.61 billion British Pound / 487.88 Billion INR on 3rd September 2013. The transaction shall be all cash, and is expected to close by the first quarter of 2014, subject to approval by the Nokia shareholders, and other customary conditions.
Microsoft means to quicken the development of its share and benefit in mobile units through quicker improvement, expanded cooperative energies, and unified marking and advertising. For Nokia, this deal is expected to be altogether accretive to income, fortify its money related position, and give a robust groundwork for anticipated venture in its proceeding organizations.
On this occasion, have a look at what the honchos have to say about this deal
“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”
- Steve Ballmer
“For Nokia, this is an important moment of reinvention and from a position of financial strength, we can build our next chapter.”
- Risto Siilasmaa
Chairman, Nokia board of directors
“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.”
- Stephen Elop
President and CEO, Nokia
Terms of the Agreement
According to the finalized terms, Microsoft will gain significantly all of Nokia’s Devices and Services business, incorporating the Mobile Phones and Smart Devices products and additionally an industry-heading outline group, operations incorporating all Nokia Devices & Services-identified preparation offices, Devices & Services-identified deals and advertising exercises, and identified backing capacities. At shutting, roughly 32,000 individuals are relied upon to exchange to Microsoft, incorporating 4,700 individuals in Finland and 18,300 workers straight included in assembling, gathering and bundling of items worldwide.
Nokia will retain its patent portfolio and will grant Microsoft a 10-year non-exclusive license to its patents at the time of the closing. Microsoft will grant Nokia reciprocal rights to use Microsoft patents in its HERE services. In addition, Nokia will grant Microsoft an option to extend this mutual patent agreement in perpetuity.
Microsoft additionally advertised that it has chosen Finland as the home for another data center that will serve Microsoft shoppers in Europe. The organization said it might contribute more than a quarter-billion dollars in capital and operation of the new server farm through the following not many years, with the potential for further extension over the long run.
As for the leadership and power change is expected, it is well rumored that Nokia CEO Stephen Elop will now be a Nokia Executive Vice President of Devices & Services and will be transferred to Microsoft.
After the news of acquisition was out, the shares of Nokia saw a jump by 40%, which is a positive sign. As for my personal view goes, Nokia has been a pioneer in building mobile phones from long, though facing a not so friendly time from quite a few time. The acquisition of most of Nokia in merely 7.18 billion against the acquisition of Skype in 8.5 billion, makes Nokia far cheaper acquisition than it could have been. This new venture can be fruitful for Microsoft-Nokia devices, and more performance can be harnessed out of the newer products. However, those who were expecting a Nokia-Android tieup in near future, would certainly be disappointed. On a funny note, I came across a comic post on 9Gag on this acquisition, you must go through it.
Please do share your views over this acquisition and news of the day