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Microsoft Buying Nokia for $7.2 Billion

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Months ago there were rumors that Microsoft was interested in buying Nokia.  The rumors eventually died down and everybody thought it was really nothing.  Now we are surprised that Microsoft has entered into an agreement with Nokia, with the former buying the device and service arms of the latter.   In the agreement, Microsoft will also license Nokia’s patents and mapping technologies. The deal involves Microsoft paying Nokia $4.99 billion for the device and service business, and $2.18 billion for to license the patent.

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Microsoft CEO Steve Ballmer was quoted as saying “It’s a bold step into the future – a win-win for employees, shareholders and consumers of both companies. 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.”

Microsoft and Nokia are into an alliance involving Windows Phone OS but no-one really expected this announcement.  The deal actually involves all devices made by Nokia, so it means that even Asha phones and other feature phones will be bought by Microsoft.

Microsoft is having a hard time catching up with Apple and Google in the mobile market and this is a move that’s supposed help it become relevant.  Apple has the iPhone and the iPad while Google’s Android platform is everywhere, and it has Motorola as its device arm, technically.  Microsoft buying Nokia is a good move but ultimately, it’s only controlling both the OS and the hardware elements of Windows Phone products.  In essence, Windows Phone is still Windows Phone and we still expect the devices to have Nokia branding.  Whatever Microsoft can add to the equation is beyond me.

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