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Microsoft Buys Nokia for $7.2 Billion

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microsoft nokiaLate Monday night, 2nd September Microsoft announced its intentions to acquire Nokia smartphones devices and services division for $7.2 billion. Microsoft will now take about 32,000 Nokia employees including Nokia’s CEO Stephen Elop (Elop used to work at Microsoft before becoming the Nokia CEO.)

Steven Ballmer, Microsoft chief executive who retired some weeks ago said “This agreement is really a bold step into the future for Microsoft,” Mr. Ballmer said in a telephone interview from Finland. “We’re excited about the talent capabilities it will bring to Microsoft.”

Microsoft intending to buy Nokia was not a surprise to so many because it has been foreseen. Since Nokia is the only manufacturing company that exclusively uses Microsoft’s Windows Phone 8 Operating system for its top-tier smartphones.

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Nokia was the second largest shipper of mobile phones after Samsung because of the low-end feature phones that they deal with. But consumers have gradually moved from that, this making Nokia not been among the top five makers of smartphones. The hope is that Microsoft buying Nokia should boost the market for Nokia smartphones.

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This is a good sign for Windows Phone, Nokia will be able to deliver better hardware devices with a greater support from Microsoft and also Microsoft now has smartphone hardware maker for its own self which makes Microsoft a dealer in both devices and services business.

Microsoft will pay about $5 billion for Nokia’s devices and services business and $2.18 billion to license Nokia’s patents. After it sells its high profile handset operations, Nokia will be left with three primary businesses: network infrastructure and services; mapping and location services; and a technology development and licensing unit.

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