Microsoft to buy Nokia's Devices & Services business

In a major and unexpected move, Nokia has announced that Microsoft will acquire its Devices & Services business. Microsoft will also license Nokia's patents and license and use Nokia's mapping services.

The dual press release from Microsoft and Nokia reveals that Microsoft will spend a total of 5.44 billion euros in cash, or $7.17 billion on the deal. That includes $4.99 billion for the business and another $2.18 billion for Nokia's patent licenses. The deal is expected to close in the first quarter of 2014, pending approval of Nokia's shareholders, regulatory approvals and other closing conditions.

The press release says that when and if the deal is closed, about 32,000 of Nokia's employees will become Microsoft team members, including 4,700 people in Nokia's home in Finland. Microsoft will now acquire the Lumia brand of smartphones that were already using Microsoft's Windows Phone operating system. Nokia first announced that it would use the Windows Phone OS back in February 2011.

Microsoft will also take charge of Nokia's Mobile Phones business unit and its budget priced Asha lineup of smartphones, but will license the Nokia brand to sell those phones. Nokia will continue to own and manage the Nokia brand.

As far as the patents deal, Microsoft has been granted a 10 year agreement to use Nokia' patents, along with another four year deal to use Nokia's HERE mapping services. Nokia will also get the rights to use Microsoft's patents for its HERE services.

Current Nokia President and CEO Stephen Elop will resign immediately from his position and become the company's Executive Vice President, Devices & Services. Nokia's current chairman of its board of directors Risto Siilasmaa will take over as interim CEO. Elop and other members of Nokia's leadership are expected to become team members of Microsoft when the deal is closed.

Source: Microsoft | Image via Microsoft

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I only see this as good news for Microsoft and Nokia. I just hope the phone designs keep getting better and not worse.

Why? Nokia's busniess was already centered around Windows Phone. It doesn't really matter.
Unless MS goes the Zune way with Nokia......

Personally I hope there's a accellerated release of phones and software updates for WP.

Market share is slowly climbing all over the world, it would be nice to gain a little bit more ground. So it's more noticable for the average consumer as a viable alternative for iPhones/Androids. Yes... it is ;-)

Dutchie64 said,
Why? Nokia's busniess was already centered around Windows Phone. It doesn't really matter.

Maybe because Nokia was sinking fast and/or verging bankrutpcy, and Microsoft felt they couldn't afford being left with their pants down in the mobile market.
That would explain why part of the adquisition deal involves a $1.5bn in financing that Nokia can withdraw inmediately.

Dutchie64 said,
but on the serious side, the patents and Maps tech are worth their money.

MS/Nokia is licensing Maps technology, ownership remains with Nokia.

Twisted it may seem, Microsoft's acquisition of Nokia is THE best EVER advertisement for its Windows Phone OS. Everyone is talking about it! Genius!!!

If any one remember, Gundotra [VP of Google, Ex-Employee of MS], tweeted that "Two turkeys [Nokia, MS] can't xxxxxxxxxxxx". Seems like now they are no more two. How's that Gundotra!!!

Once Nokia began developing a WnRT tablet this was inevitable. Both of these companies are lucky to do this deal now because if something changed within the other they would have destroyed each others market.
The winds of change have brought this about - Nokia's share price would start to increase based on recent success and become an expensive pill to swallow by MS shareholders, particularly if usage fluctuated in coming months.

This move should finally please analysts, the only caveat being the Nokia division must be ran at arms length from MS and act as the internal customer.

Microsoft Please don't make Nokia smartphones limited to specific markets like you did with surface rt and Pro... im afraid and happy in the same time

subcld said,
Microsoft Please don't make Nokia smartphones limited to specific markets like you did with surface rt and Pro... im afraid and happy in the same time

If you read news/letter from MS, you will see that they are buying because they want to take hold of Developing Nations since they already lost market to Developed Nations.

subcld said,
Microsoft Please don't make Nokia smartphones limited to specific markets like you did with surface rt and Pro... im afraid and happy in the same time

There are regional licensing issues that held back Surface availability. Since Nokia is already in these markets nothing will change and it may help Microsoft get other devices like Surface in markets they were prevented from easily entering.

Microsoft's lack of support in regions wasn't because they wanted to not sell their products there or artificially restrict their consumer market.

The Trojan Horse effectively wrecked Nokia from the inside out, Elop was essentially a Microsoft virus with a time bomb that eventually went off, dragging Nokia in a downwards spiral.

Unexpected maybe but it raises a warning flag the next months to come.
Nokia slashed the R&D-time for their phones. Devices & Services need to have a quick phase and keep developing phones like nothing ever happened.

WP ecosystem is slowly growing even in mature markets such as the Nordic region. The MS buyout cannot create a development-vacuum within the subsidiary they just bought otherwise they'll risk loosing market shares and also growth-pace that the ecosystem gained.

Business as usual? Sure as long as I get the same Here experience with along with the best camera in the world.

Just need to add one thing. Android would never work for Nokia. They would have become a margin-player like HTC and Sony.

frostnose said,
Just need to add one thing. Android would never work for Nokia. They would have become a margin-player like HTC and Sony.

As of now, definitely.

Back when they began steering ship, though, it could have been Nokia who raised as top Android OEM instead of Samsung.
We will never know what could have happened now anyway, so it's all just "what-if" speculation.

How sad, I loved Nokia phones in the past. I always hoped the MS exclusive thing would one day end. The dream was always Nokia hardware with Android.

Orange Battery said,
How sad, I loved Nokia phones in the past. I always hoped the MS exclusive thing would one day end. The dream was always Nokia hardware with Android.

So true.....we can only dream!

"Nokia expects that Stephen Elop, Jo Harlow, Juha Putkiranta, Timo Toikkanen, and Chris Weber would transfer to Microsoft at the anticipated closing of the transaction. Nokia has outlined these changes in more detail in a separate release issued today."

5150III said,
Aaaaand that's the final nail in the coffin for Nokia. Too bad. An Android Nokia would have been awesome.

With regard to moving forward with new technologies and performance, Android is a mess.

Unless there is a massive rewrite of Android, it will be relegated to a footnote like other huge platforms that failed to have the architectural underpinnings to evolve with the technology.

Android has had two massive opportunities to move up, but deliberately passed on both - apparently not wanting to compete heads-up with Apple.

No x86 version (Atom, Bay Trail, etc.) - while possible, name one OEM giving it serious consideration.
Upscale ARM - basically same hardware RT runs on.

For all the blasting Android fans have done at RT, if you were serious about competing with RT (or iOS), you would have done one or both. You still CAN do one or both - however, that would not only bring you Apple's attention, that wquld also unshackle Microsoft, wouldn't it? Somehow, you like the thought of keeping Microsoft hobbled - an unshackled Microsoft is dangerous to you business-wise. ("Now, now, no waking up the giant.")

Enron said,

ftfy


Made a typo my friend:

Yeah, that's what I said, it would have been Android, which would have been a HELL of a better phone than the crap Nokia is currently making

You must have selected text and hit "Delete" by accident.

HA HA HA HA HA HA HA ... eat your hearts out, neowin ant-boys.

nokia is now officially microsoft's beach. who would have thought. HA HA HA ...

RommelS said,
Rumored RT and Windows Phone OS merging into one is closer to reality.

If this will mean Windows Update delivering GDRs or whatever they will call them to my phone I am a happy camper....

Fritzly said,

If this will mean Windows Update delivering GDRs or whatever they will call them to my phone I am a happy camper....

You know, if the problem with delaying phone updates is carrier testing, or the excuse anyways, then why can't MS just do that program it talked about almost a year ago and let users who have unlocked/unbranded devices just update without any sort of carrier in the middle BS? Or do the carriers care so much just because they might connect to their network?

Seriously, if it's about testing and support then I bet people wouldn't mind if they voided their warranty by being able to upgrade when they wanted to and not wait.

RommelS said,
Rumored RT and Windows Phone OS merging into one is closer to reality.

True, but completely irrelevant to the Nokia deal. Microsoft has talked very specifically about the UI and framework migration of the two application layers of the platform.

The underlying kernel and subsystems are already identical, it is essentially only the application framework that differs.

So if they only bought the devices and services unit...what's left? I didn't think Nokia did anything but devices and services.

Wow, the buy-out was really cheap; Verizon just paid $130 Billions to buy the 45% of Verizon Wireless that was owned by Vodafone GB.

I really have mixed feelings here. I like what Microsoft and Nokia have done, but as a business decision, this could have rather significant ramifications... Microsoft has worked hard to build relationships with other OEM's, and they will likely lose any commitment these other OEM's had to Windows Phone...

M_Lyons10 said,
I really have mixed feelings here. I like what Microsoft and Nokia have done, but as a business decision, this could have rather significant ramifications... Microsoft has worked hard to build relationships with other OEM's, and they will likely lose any commitment these other OEM's had to Windows Phone...

If they can build upon the lumia and their surface brands well enough then they won't need additional hardware OEMs to slowly and poorly push their products. Outside of Nokia who really has been doing a great job with WP hardware? Samsung recycled their S3 and poorly I might add. Have it no advertising and shelved everything else. Acer? You have some Chinese OEMs willing to play and their brand might be their ace in the hole. So where Nokia can't penetrate other brands will hopefully fulfill the gap. I see it working out where the direction of MS is shifting towards their initiative that was laid out recently by Ballmer. Ballmer will not leave a poor man, a hated man or a bad CEO.

Marco leaving might not be all that bad. MS has some very good designers and the surface is a testament to that. Will be interesting nonetheless

so Apple, Google and Microsoft will be making their own phones. Possibly Amazon. How about pulling together and make their own networks and put ATT, Verizon and the rest out of business.

That's about what I thought as soon as I heard Ballmer was hitting the golf course within a year or less. Stephen side stepping to VP of HARDWARE AND SERVICES which is what MS wants to be known for too. He was a good leader at MS before Nokia, brought Nokia back to some relevance and I think would make a great CEO of MS. Hope the board members and Gates agree. Elop is an incredible speaker, well liked before and after he left MS and is a techy at heart. I hope he gets the CEO job. Handing over the position of CEO is a good indicator that he is in major contention for the CEO position at MS.

CygnusOrion said,
Also he doesn't do monkey dances and doesn't trash the competition. He's always very gracious talking about Apple.

I agree. His approach is different but is effective. Since the reorganization efforts that have been taking place at MS. This means the next MS CEO has less overall responsibilities and more direct moves that relate to the overall idea that MS wants to be hardware and services company. Technically ELOP is an outsider if they hire him. He will be working within MS for Nokia. He has more knowledge than anyone at MS for Mobile hardware right now and by buying patents and cross licensing it ensures that any non compete or product knowledge that ELOP is privy to and Nokia has in their lineup is not an infringement or trade secrets giveaway. Will be very interesting to see how this all places out. Nokia gets to keep patents and profits from it's Here technology and maps and MS gains a hardware division that can compete at Apples design and manufacturing level.

If anything believes there is NOT a Surface Phone lying around waiting for the patents to go to market, they are deluding themselves.

mrmomoman said,
That's about what I thought as soon as I heard Ballmer was hitting the golf course within a year or less. Stephen side stepping to VP of HARDWARE AND SERVICES which is what MS wants to be known for too. He was a good leader at MS before Nokia, brought Nokia back to some relevance and I think would make a great CEO of MS. Hope the board members and Gates agree. Elop is an incredible speaker, well liked before and after he left MS and is a techy at heart. I hope he gets the CEO job. Handing over the position of CEO is a good indicator that he is in major contention for the CEO position at MS.

do you think that such huge decision happens without consulting Gates before?
Gates is not working at MS, but he's still aware of what's happening

erm, Gates doesn't need to be consulted, he is chairman of the board and a major shareholder, he still very much takes the decisions and still very much works for Microsoft.

xchaser said,
I guess the all Android Fans can really scratch out Nokia ever making an Android phone.

Or a WP for than matter, since Nokia is no longer making phones at all

xchaser said,
I guess the all Android Fans can really scratch out Nokia ever making an Android phone.

Never say never but yup, it will be at least a decade before we see a Nokia phone running Android (out of the box/retail)

Surface Phone like the "Nexus" of Windows Phone can be a reality.

LA LA LA...Knew this would happen but didn't see it coming.

CygnusOrion said,
Given the design of the Surface tablets, I think a Surface Phone would be very well received IF it had top specs.

Yes and especially when I get a vanilla OS with the assured updates for couple of years, I am game.

This isn't android. Every Windows Phone smartphone ever released has vanilla OS with guaranteed update support for at least two years.

AsherGZ said,
This isn't android. Every Windows Phone smartphone ever released has vanilla OS with guaranteed update support for at least two years.

And yet people are still completely at the mercy of carriers to push out updates.

Shadowzz said,

Carriers/OEM's can stay 1 update behind.

My point exactly and I don't want to stay 1 update behind. I want the Nexus kinda experience from WP.

RommelS said,
Microsoft Surface 2 - Made by Nokia Division.

So, that leaked Nokia tablet is now the Surface 2? Actually, with this deal they could just switch things over to the Lumia brand and maybe drop the Surface or keep that to, no reason not to have both brands in tablets.

AsherGZ said,
Or Surface brand for tablets and Lumia brand for phones.

I think the Lumia brand on a smaller 8" RT without the desktop would be worth it. They could keep surface for 10" and maybe a future Surface ultrabook with a 15" screen to if they wanted to expand it.

Or Lumia could be just RT while Surface is x86 tablets.

GP007 said,

I think the Lumia brand on a smaller 8" RT without the desktop would be worth it. They could keep surface for 10" and maybe a future Surface ultrabook with a 15" screen to if they wanted to expand it.

Or Lumia could be just RT while Surface is x86 tablets.

Totally agree. However, MS need to hurry out up with the 8" tablet since consumers are now gunning for smaller form factor.

Well they did not buy the whole company. There is still Nokia, but they will focus on other area instead of mobile hardware.

CygnusOrion said,
I'm kind of surprised the Finnish government allowed this to happen.

ians18 said,

Only hope MS can retain the durability brand image of Nokia

true and i hope they will continue releasing phones to each and every market

Hardly would be the worst thing. He brought a focus & energy to Nokia. He didn't embarrass himself with unprofessional behavior. I think he'd be a solid choice for the next phase in Microsoft's history.

This is only a formality. Nokia has been owned by Microsoft ever since they sold out to exclusively use Windows Phone. They've been a mere puppet.

I think it would have been smarter to continue this, and maybe even tighten the partnership, instead of buying them. But now Microsoft has the Nokia team, and Nokia is very experienced in hardware, more than Microsoft.

Major_Plonquer said,
And the most important card in the deck, Nokia patents. Yet another stick to beat Android with.

Nokia was waving that stick around already and so far has failed to break the piñata.
You can bet Microsoft will continue in the same line trying to strike deals with Android OEMs... so the same game with a different set of lawyers.

jEN0VA said,
Does this mean the phones will soon be sold as Microsoft Lumias or will it retain the Nokia name?

I think this deal will be like the Skype deal in that the brand stays the same just like with Skype until you look deep in the fine print and see that it's owned by MS.

jEN0VA said,
Does this mean the phones will soon be sold as Microsoft Lumias or will it retain the Nokia name?

If I understand it all correctly Nokia is retaining the rights for the Nokia brand and Microsoft gets allowance to use that brand only for their already released products.

Which would mean that Nokia phones are effectively dead, whatever MS releases in the future could be Lumia but not Nokia.

Again, that's if I'm understanding it correctly.

http://www.theverge.com/2013/9...be-another-nokia-smartphone

Edited by ichi, Sep 3 2013, 8:15am :

ichi said,

If I understand it all correctly Nokia is retaining the rights for the Nokia brand and Microsoft gets allowance to use that brand only for their already released products.

Which would mean that Nokia phones are effectively dead, whatever MS releases in the future could be Lumia but not Nokia.

Again, that's if I'm understanding it correctly.

http://www.theverge.com/2013/9...be-another-nokia-smartphone

I think it's fine, it doesn't need to say Nokia as long as it says Lumia. People know things like iPhone, Galaxy, Lumia, Skype, Xbox and so on. MS can do what they did with Skype and just leave it as Lumia and not even put the MS logo or name on any future phones/tablets.

GP007 said,

I think this deal will be like the Skype deal in that the brand stays the same just like with Skype until you look deep in the fine print and see that it's owned by MS.


It's not that hidden, Microsoft's name shows on the homepage of Skype.com.

CygnusOrion said,
Now here's hoping they don't screw things up. Microsoft can now bring any relevant MSR inventions to Lumia phones.

Well so far it was MS slowing down Nokia, it will be interesting to see how things will evolve; hopefully Nokia will will be able to speed things up and not the other way around.

Fritzly said,

Well so far it was MS slowing down Nokia, it will be interesting to see how things will evolve; hopefully Nokia will will be able to speed things up and not the other way around.

Hahaha! Just one word, my friend, "MeeGo". If it wasn't for Microsoft, Nokia still wouldn't have an OS.

Major_Plonquer said,

Hahaha! Just one word, my friend, "MeeGo". If it wasn't for Microsoft, Nokia still wouldn't have an OS.


Personally I liked MeeGo but, besides personal preferences, if MS OS was not available Nokia could have been where Samsung is today with Android. On the other hand.... where,would be MS today without Nokia?

Fritzly said,

Personally I liked MeeGo but, besides personal preferences, if MS OS was not available Nokia could have been where Samsung is today with Android. On the other hand.... where,would be MS today without Nokia?

I find it telling though that the Android OEM unit sales break down is quite telling. From what I remember there's Samsung with this huge number and then all the other OEMs who sell 15million units or less a quarter. So it's all relative really, with Nokia selling 7.4million Lumia devices it's catching up to other Android venders like LG who sold 12million or so.

Honestly though, you don't have to try and be #1, not in such a huge market like smartphones. Nokia, now MS, can do just fine by selling 15-20million Lumias a quarter for example.

CygnusOrion said,
Now here's hoping they don't screw things up. Microsoft can now bring any relevant MSR inventions to Lumia phones.

I find a problem with Microsoft Research is that so few of their ideas come to fruition though. So while they can theoretically make it happen, I'll be cautiously optimistic at best about practically making it happen.

I couldn't access the Verge at the time, but I read their news article and it says Elop will join Julie Larson-Green to lead the Devices and Services division.

Sionic Ion said,
I couldn't access the Verge at the time, but I read their news article and it says Elop will join Julie Larson-Green to lead the Devices and Services division.

Well, Elop makes more sense at the role of devices and services compared to Julie, not that she can't get the job done but she doesn't have the experience Elop does in that department.

Well it is major and unexpected move that came out of nowhere. Sure we were expecting it, and there were some rumors. But nothing about it happening as they decided this which is surprising since it is a big decision. This is great news! We can for sure see a Surface Phone now! And we can finally see faster updates now that Microsoft will be in control of the devices their software runs! I'm so happy for them, I have an HTC One, and gave up hope that Windows Phones would improve in the short-term, but maybe my next phone will be a Lumia or Surface Phone now!

virtorio said,

Was it really that unexpected?

Yes, since now Lumia the only major wp series is now going to be developed in house.

ahh well, there's the kiss of death to Windows phone.

All microsoft's hardware has failed in the market place, with the possible exception of xbox which has been on life support (large subsidies) from day 1.

You know what I mean...it is unexpected after it seemed the talks fell through, long-term it was expected, short-term like right now it was unexpected.

Northgrove said,

Not since Microsoft planted that mole, it wasn't.

Could you please explain how MS did that? I really wonder why ppl talks non-sense without reading news. Nokia board contacted Elop to become CEO not the other way. ok?

dvb2000 said,
ahh well, there's the kiss of death to Windows phone.

All microsoft's hardware has failed in the market place, with the possible exception of xbox which has been on life support (large subsidies) from day 1.

Well I agree with your statement that almost all MS consumer hardware doesn't do well or fails. The Xbox however still sells pretty well and is not on life support. Your statement is disingenuous.

Every major console except the Wii, probably the Wii U, and Gamecube is/was a loss leader. So if your point is that MS subsidies the Xbox, well yes, that's standard practice and has been since pretty much the beginning of gaming consoles. The money is in the licensing.

As for the death of Windows Phone, I doubt it. When MS puts a stake in the ground for a product, they don't stop. Hence why they bought Nokia.