Microsoft made a huge announcement today, that the company is buying Nokia’s devices and services division for $7.2 billion. This marks the end of Stephen Elop’s tenure in Nokia as the CEO.
The announcement was made on Microsoft’ PR website, which explains the split up of the amount which would be utilized for this acquisition. The company would spend $5 billion on the devices and services business of Nokia and the remaining $2.2 billion will be used to license Nokia’s patents.
The entire $7.2 billion acquisition will be paid in cash by Microsoft and the transition is expected to be complete in the first quarter of 2014, and Nokia’s current CEO, Stephen Elop (Who happens to be a good friend of Microsoft’s CEO, Steve Ballmer), will be stepping down as the CEO of Nokia during the transition. Elop will then lead Microsoft’s expanded Devices division.
The transition from Nokia to Microsoft will witness over 32,000 employees moving to Microsoft. And this includes all the top executives from Nokia, and they’re expected to take charge of the same team at Microsoft.
The new acquisition will empower Microsoft to become a devices and services company, and Microsoft also notes the same in its press release. Microsoft also explains why this move will change the pace of innovation which is happening at Microsoft:
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.
The news has just come out, and we are sure that we will witness a lot of comments from top executives in the days to come. But considering the relationship Nokia has with Microsoft, this move feels right for now.
One the other hand, some of the oldest mobile phone manufacturing companies are being acquired, and may be we will witness an ecosystem where only three companies would control the entire smartphone industry across the world.
Lastly, if you had a hope that Nokia would bring Android phones to the market, we’re sorry, that is not going to happen anymore. Hit the source link to read the entire press release by Microsoft.