Microsoft has just announced that they will purchase Nokia’s devices and service business for $7.2 billion or €5.44 billion which will be the main form of payment for deal.
Such a move for Microsoft will allow them to accomplish what Microsoft’s competitor, Google, has been doing with Motorola over these past few months. Microsoft will be accessing their offshore cash resources for this deal which has an expected closing date of the first quarter for 2014.
“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. 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,” said Steve Ballmer, who will be stepping down as Microsoft’s CEO.
With such a company under Microsoft’s supervision, Nokia can now start mass producing Windows 8 Phones to help boost market share, which is currently filled with Samsung Galaxy and iPhone devices. Windows 8 Phone OS only accounts for a low 20% of the smartphone market.
Nokia for the past two years has been working very closely with Microsoft in producing Windows 8 Phone products only; they even launched the Lumia lineup which is slowly becoming a name-brand. Personally I find the Lumia line to be one of the finest smartphones available especially with its new and revised OS.
The deal with Nokia will allow “faster innovation, increase synergies, and unified branding and marketing,” as Microsoft likes to put it. When the deal finally closes 32,000 Nokia employees will transfer to Microsoft as the plan is to keep Nokia as the same company.