Microsoft to buy Nokia's phone business

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.

The press conference is held today at 11 am in Espoo Dipoli.

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.

259 Comments

  1. Tomi Engdahl says:

    On February 11, 2011 will inevitably go down in history of the Finnish high-tech. At that time, Nokia and Microsoft announced the historic co-operation, the aim of which was to create a third ecosystem of Apple’s iOS in addition to Android and Google. Final act began yesterday, when Microsoft announced the end of the Mobile business.

    Elop painted third ecosystem comprise a circuit manufacturers, the best mobile platform, the best equipment, application developers, the army and the operator cooperation. He forgot their list actually only the most important issue: consumers. The ecosystem can not be created, if no one wants to buy its products.

    This in turn led to the fact that the range of applications never taken even a threat to the iPhone and Android devices supply – and did not interested operators very much.

    Nokia’s Windows-decision was a very small group of accomplishment.

    After the decision, a big part of the Symbian Qt Developers began to write job applications to other firms.

    Source: http://etn.fi/index.php?option=com_content&view=article&id=4496:elopin-johdolla-nokia-hylkasi-kuluttajan&catid=13&Itemid=101

    Reply
  2. Tomi Engdahl says:

    Expert Rating: “iPhone started to Nokia’s own 9/11″

    IT expert Petteri Järvinen gives absolution often bark restricted Stephen Elop.

    Fiction writer, IT expert and columnist Petteri Järvinen reveals in a recent blog posting your views on what factors led to the downfall of Nokia’s mobile phone business.

    - The real blame for the destruction of Nokia mobile phones was not Microsoft, but the company’s management and Board of Directors, which approved the early 2000s, the peak years of bad management.

    Järvinen’s view, Nokia’s management did not set sufficient weight to future Trends mobile phone business with, such as touch screens.

    - Nokia fell by their own arrogance to believe that only it knew what was supposed to be a smartphone. Even Apple presented the iPhone in January 2007, did not get Nokia to listen to customers.

    - The company downplayed the touch screen and laughed a small competitor, even my own staff saw, what the development was going.

    - No later than after yesterday’s news is forced to look in the mirror: Elop was not a mole, who fraudulently seized Nokia’s business.
    - On the contrary, thanks to him, Nokia got rid of loss-making and, more recently, that proves hopeless phone manufacturing.
    - Microsoft paid a purchase price of billions

    Source: http://www.digitoday.fi/bisnes/2016/05/30/asiantuntijan-arvio-iphonesta-alkoi-nokian-oma-911/20165794/66?rss=6

    More: http://pjarvinen.blogspot.fi/2016/05/steve-ballmer-oli-suomen-myyra.html

    Reply
  3. Tomi Engdahl says:

    At the latest after yesterday’s news is forced to look in the mirror: Elop was not a mole, who fraudulently seized Nokia’s business. On the contrary, thanks to him, Nokia got rid of loss-making and, more recently, that proves hopeless phone manufacturing. Microsoft paid a purchase price of billions and has been beneficial for the Finnish economy by employing more than one thousand Finns to this day. Thanks to the billions, Elop! You have earned your pension from Finland.

    Last summer, Microsoft wrote down almost all the sales pitches to pay the price. Telephone business is a adoption had proved costly mistake.

    Android and iPhone smartphones were brought to an all new level and changed the game in a way that Nokia’s then-management is not able to respond to: the decision to choose Nokia phones Microsoft’s operating system was a mistake, but when the company was already mired in an awkward position in February 2011 made.

    The real blame for the destruction of Nokia mobile phones was not Microsoft, but the company’s management and Board of Directors, which approved the early 2000s, the peak years of bad management. Nokia fell by their own arrogance to believe that only it knew what was supposed to be a smartphone.

    A particularly sad this is because Nokia’s vision of the smart phone everyday magic wand, online services and advanced terminal device description was exactly right. Nokia was unable to carry out the future of what they see, even if it had an overwhelming market share, and all technical conditions.

    ask why the Finnish company’s history with brilliant ruined their own future

    Nokia’s Ollila was critical in the company’s President and CEO and later Chairman of the Board of Directors.
    Ollila When asked about the company’s difficulties, he seemed to take it lightly, and did not want to evaluate the mistakes made.

    Source: http://pjarvinen.blogspot.fi/2016/05/steve-ballmer-oli-suomen-myyra.html

    Reply
  4. Tomi Engdahl says:

    Nokia Technologies biss: we will not return to Mobiles

    when Nokia bought back the rights from Microsoft, Nokia, the name is considered favorite in the market, the pace at which yhtöi returns to smartphones. The name of licensed HMD also was seen as a kind of ‘man of straw. However, Nokia Technologies’ Vice President Ramzi Haidamus declares that the company is not returning to the mobile phones.

    - Mobile Phone include our history, not our future. We do not have any interest in the band or do not want to go back to the mobile phone business, Haidamus says in an interview with ZDNet.

    Source: http://etn.fi/index.php?option=com_content&view=article&id=4617:nokia-technologies-pomo-kannykoihin-emme-palaa&catid=13&Itemid=101

    Reply
  5. Tomi Engdahl says:

    ‘Mobile phones are our history, not our future’: Nokia on where next for hardware
    Nokia’s hardware chief reveals what to expect in health, virtual reality, and the Internet of Things
    http://www.zdnet.com/article/mobile-phones-are-our-history-not-our-future-nokia-on-where-next-for-hardware/

    With the ink barely dry on the contract to sell its handset business to Microsoft back in 2013, people started asking Nokia when it would get back into making phones again, and they’ve been asking ever since.

    It looks like those people finally got their answer last month when news broke that Nokia branded smartphones, featurephones, and tablets would be seen on shelves once again.

    However, the answer to the question ‘is Nokia making phones again?’ is an unequivocal no.

    “We have absolutely no interest to go back into the mobile business. That’s our history, not our future,” Ramzi Haidamus, president of Nokia’s Technologies unit, told ZDNet.

    Instead, Nokia is licensing its name to a Finnish company called HMD, who will design, make, and sell Nokia-branded devices.

    If you’d never heard of HMD before, you’re not alone — HMD only came into being when it signed the deal with Nokia. Made up of former Nokia execs with private equity backing, Nokia finally signed on the dotted line with HMD after being convinced that the company would “keep the brand pristine”, according to Haidamus.

    “The setup was the best setup so far, and we’ve examined something like around a dozen different approaches. People have been approaching us since the day we divested the business…. HMD was the one that presented us with the most attractive financial terms and, secondly, trust that the team that will be able to live up to the brand and the brand promise, and adherence to brand guidelines,”

    Nokia won’t be in any way involved in the company — it won’t be designing reference devices as it did for the N1 tablet that Foxconn made under the Nokia brand

    Reply
  6. Tomi Engdahl says:

    Surprise! Microsoft found 2,850 more jobs to cut as it continues its retreat from the phone business.
    The company has now shed nearly all of the Nokia mobile phone business that it acquired in April 2014.
    http://www.recode.net/2016/7/28/12319010/microsoft-cutting-more-phone-jobs

    Microsoft is cutting an additional 2,850 jobs as it further curtails its smartphone efforts and restructures its sales force.

    About 900 of those workers have already been notified, Microsoft said.

    The new cuts, which were disclosed in the company’s annual report on Thursday, come on top of the 1,850 layoffs announced in May as the company retreated even further from the phone business.

    At this point, Microsoft has essentially shed nearly all of the Nokia mobile phone business that it acquired back in April 2014 for $7.2 billion.

    Reply
  7. Tomi Engdahl says:

    New Nokia Smartphones and Tablets Are Coming in Late 2016: Company Executive
    https://hardware.slashdot.org/story/16/08/17/1935259/new-nokia-smartphones-and-tablets-are-coming-in-late-2016-company-executive

    The resurrection of the Nokia brand may happen in the fourth quarter of this year, which could make for some really nostalgic holiday gifts. According to Chinese site ThePaper (in Chinese), Nokia executive Mike Wang confirmed that three or four Nokia-branded Android devices are on the way for the fourth quarter of 2016. The comeback effort would include both phones and tablets. There is a chance, however, that the timeline could get pushed back depending upon how things progress.

    Report: New Nokia smartphones and tablets are coming in late 2016
    http://www.pcworld.com/article/3109048/android/report-new-nokia-smartphones-and-tablets-are-coming-in-late-2016.html

    The reboot comes from HMD, a Finnish company composed of ex-Nokia and Microsoft employees.

    The resurrection of the Nokia brand may happen in the fourth quarter of this year, which could make for some really nostalgic holiday gifts.

    According to Chinese site ThePaper, Nokia executive Mike Wang confirmed that three or four Nokia-branded Android devices are on the way for the fourth quarter of 2016. The comeback effort would include both phones and tablets.

    It wouldn’t be a terrible shocker considering we’re talking about a new company, HMD. It’s composed of former employees from Microsoft, the old Nokia, and others who are banding together to resurrect the once-iconic brand.

    Reply
  8. Tomi Engdahl says:

    Nokia’s Brand Goes to Startup With $500 Million Plan
    5/18/2016 02:31 PM EDT
    http://www.eetimes.com/document.asp?doc_id=1329712&_mc=RSS_EET_EDT&hootPostID=c3b5c9ea2e7d87629a2f85dc2287bc78

    A startup called HMD Global Oy (Helsinki, Finland) has been formed to takeover the Nokia brand for mobile phones and tablet computers and has said it intends to spend $500 million marketing Nokia as an Android-based mobile device over the next three years.
    HMD has signed a license agreement with Nokia Technologies, the licensing unit of Nokia Corp., giving HMD sole use of the Nokia brand on mobile phones and tablets worldwide for a decade as well as licenses to patents essential to cellular communications standards. The company has conditionally agreed to acquire from Microsoft Corp. the rights to use the Nokia trademark on feature phones until 2024, and design rights relating to Microsoft’s feature phone nusiness. This transaction is expected to close in the second half of 2016.

    HMD is owned by Smart Connect LP, a private equity fund managed by Jean-Francois Baril, a former Nokia executive, as well as by HMD management. The company said it would get funds from investors and from the profits of the acquired feature phone business.

    As part of the same deal Microsoft is selling remaining feature phone business assets, including a manufacturing facility in Hanoi, Vietnam, and global distribution and supply chain networks to FIH Mobile Ltd., a subsidiary of Hon Hai Precision Industries (trading as Foxconn Technology Group).

    Reply

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