Stephen Elop’s task on turning Nokia Mobile phones business to Microsoft compatible has come to end: Microsoft Corporation and Nokia Corporation today announced that the Boards of Directors for both companies have decided to enter into a transaction whereby Microsoft will purchase substantially all of Nokia’s Devices & Services business, license Nokia’s patents, and license and use Nokia’s mapping services.
Microsoft will pay EUR 3.79 billion to purchase substantially all of Nokia’s Devices & Services business, and EUR 1.65 billion to license Nokia’s patents with EUR 5.44 billion all-cash transaction. Under the terms of the agreement, Microsoft will acquire substantially all of Nokia’s Devices and Services business, including the Mobile Phones and Smart Devices business. Microsoft is acquiring Nokia’s Smart Devices business unit, including the Lumia brand and products. The deal includes, among other things, the Nokia Asha brand.
The transaction is expected to close in the first quarter of 2014, subject to approval by Nokia shareholders, regulatory approvals and other customary closing conditions. Microsoft has agreed to a 10 year license arrangement with Nokia to use the Nokia brand on current Mobile Phones products. Nokia will continue to own and maintain the Nokia brand.
Following the transaction, Nokia plans to focus on its three established businesses: NSN (network infrastructure and services), HERE (mapping and location services and Advanced Technologies (technology development and licensing).
Stephen Elop will be coming back to Microsoft, and he will lead an expanded Devices team, which includes all of our current Devices and Studios work and most of the teams coming over from Nokia. As part of the acquisition, a number of key engineering leaders will be joining Microsoft from Nokia. Approximately 32 000 employees are expected to transfer to Microsoft. Among them, 4 700 in Finland. Microsoft is getting several of the cellphone industry’s better-known leaders in one shot — and Nokia’s remaining leadership will be mostly unrecognizable to long-term fans.
I was fearing that this could happen already two years ago. Now it has happened. Microsoft’s acquisition of Nokia’s Devices & Services business has more implications for Nokia than you might suspect at first glance. Nokia CEO Stephen Elop is stepping down ahead of transition to Microsoft. Nokia’s Chairman of the Board Risto Siilasmaa will be Nokia’s interim director. Timo Ihamuotila will be interim CEO.
Forbes analyst Tero Kuittinen is surprised by Stephen Elop activities: Elop chose Nokia to become Microsoft Windows operating system company and ther operating systems, development stopped completely. Now he’s decided to sell Nokia’s smartphone unit at greatly reduced prices … Microsoft, a company in which he returns, Kuittinen says. Nokia Sells Handset Business To Microsoft At A Shockingly Low Price tells that it cannot be said that Nokia‘s decision to sell its handset unit to Microsoft is a surprise. But what definitely are surprises are the timing and the price. Nokia’s glory days of 110 B euro market cap are long gone – yet it’s a visceral shock to see the Devices and Services unit sold under 5.5 B euros.
Etla research director Jyrki Ali-Yrkön says that Nokia phones sales to Microsoft is a sign of the error from the previous move: “As a result, the company acknowledges that Microsoft’s operating system is not enough to save Nokia” Something similar I was thinking more than 2 years ago at my Nokia future: Windows Phones posting. And the current news clearly shows that the previous decision – the Windows Phone operating system transition – was not correct.
This is the end of the Nokia as I used to know it…. Nokia’s importance to Finland has been in 90’s and since the early 2000’s insane. It has pulled the tail of starring in other IT companies in the world, and helped the Finnish international. Now, a big part of it is gone.