Tuesday, September 03, 2013

Microsoft Acquires Nokia for $7.2 Billion

Not long ago, there was a brand like no one. It reigned for well over a decade with series of its versatile phones. They were known for their hardware and the never ending battery backups. Well, if you are a Nokia fan, it is a bad news, in fact I must say not only for Nokia admirers but for every one out there, as one of the best mobile phone makers Nokia have been acquired by the PC giant Microsoft for $7.2 billion.


Microsoft acquired Nokia's devices and services division and now the "Lumia" and "Asha" trademarks will transfer to Redmond, but the "Nokia" brand will remain the property of Finnish company and may only be used on feature phones running the basic S30 and S40 operating systems under a 10-year license agreement.
What is most hurting is that Nokia itself is barred from using the Nokia brand on any mobile devices at all until December 31st, 2015. Which means the next Lumia Smartphone will be printed with Microsoft logo and we are refrained from seeing any of Nokia labeled Lumia Smartphones.

Nokia succumbed to the dominance of Samsung and Apple in a highly competitive market for smartphones. Nokia dominated the mobile phone market for 14 years, until it was overtaken by Samsung in 2012 as the top-selling brand, as it struggled to establish winning business models and mobile devices. Nokia will grant the Microsoft with a 10-year non-exclusive license to its patents and will now concentrate on its networking equipment unit, navigation business and technology patents only.


The CEO of Nokia, Stephen Elop who was hired from Microsoft in 2010 will be replaced in the interim by Risto Siilasmaa, Nokia's chairman of the board. The hand shake involved in phasing out Nokia's Symbian platform in favour of a partnership with Microsoft, introducing handsets powered by Windows Phone software labeled as Microsoft.

32,000 Nokia employees are expected to transfer to Microsoft once the deal is concluded. Of the total purchase price of 5.44 billion euros, 3.79 billion relates to the purchase of Nokia's devices and services business, and 1.65 billion relates to the mutual patent agreement and future options.

Nokia will book a gain on the sale of some 3.2 billion euros, which would "clearly strengthen our financial position and it will provide a solid basis for future investment in Nokia's continuing businesses," Siilasmaa said.

But sadly, Tuesday's announcement marks the end of Nokia's days as an independent phone manufacturer.

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