News roundup: Microsoft purchases Nokia's mobile devices unit


Stephen Elop, Nokia's former CEO, may be a candidate for Microsoft CEO Steve Ballmer's replacement.

Microsoft agreed to purchase Nokia's devices and services division, best known for its smartphones, early Tuesday morning. The biggest impact of the deal involves Microsoft obtaining the Lumia and Asha brands and hardware, along with the Nokia teams responsible for them, though the deal has other ramifications.

The acquisition, expected to close in the first quarter of 2014, will also allow Stephen Elop, Nokia's CEO prior to the deal's announcement, as the head of Microsoft's devices division. Elop could become a primary candidate to replace current Microsoft CEO Steve Ballmer, who recently announced plans to retire within a year.

Microsoft to buy Nokia's devices and services division

  • Microsoft has agreed to purchase Nokia's devices and services division for about $7.17 billion, pending regulatory and shareholder approval. As part of the deal, about 32,000 Nokia employees will become Microsoft team members, including 4,700 in Nokia's Finnish offices.
  • The Lumia and Asha brands will be owned by Microsoft when the deal closes, though Microsoft will license the Nokia name to sell the latter devices. Lumia has been Nokia's Windows Phone brand since the company's first device using Microsoft's mobile operating system launched in February 2011.
  • Microsoft signed a 10-year license agreement to use Nokia's patents as part of the deal, and the company will also license Nokia's HERE mapping services for four years.

Stephen Elop returning to Microsoft as part of Nokia deal

  • Elop will return to Microsoft as part of the deal, the company where he once oversaw the development of the Office productivity software suite; he left Microsoft in 2010 to become Nokia's chief executive.
  • Until he returns, Elop will serve as an executive vice president at Nokia, in charge of the company's devices unit. Risto Siilasmaa, chairman of Nokia's board of directors, will serve as interim CEO until a replacement is found.
  • When the deal closes, Elop will be in charge of Microsoft's devices division, overseeing all of the company's devices and studios as well as the majority of the teams Microsoft acquires from Nokia as part of the deal.

What Microsoft's deal to acquire Nokia will mean to everyone

  • A strategic document released by Microsoft states the acquisition of Nokia's devices unit was made because the company "cannot risk having Google or Apple foreclose app innovation, integration, distribution or economics."
  • The document also states the HERE mapping services will serve as "an effective alternative" to Google's mapping services. The implication likely means devices from other OEMs will use the HERE services as part of the acquisition.
  • Microsoft will continue to release apps and services for Apple's iOS and Google's Android mobile operating systems, such as the recently released Office 365 apps.

What will be left of Nokia after Microsoft's deal closes?

  • Nokia will retain about 56,000 employees after the deal is finalized, and three businesses will remain, including Nokia Solutions and Networks, which was previously a joint venture between the company and Siemens.
  • The other two businesses remaining include the company's HERE mapping services and its advanced technologies unit; the latter business will continue to expand the company's patent holdings and work on new projects involving "connectivity, sensing and material technologies, as well as web and cloud technologies."

Microsoft OS leader: Buying Lumia "will help" other Windows Phone OEMs

  • Terry Myerson, the new head of both Windows and Windows Phone, says Microsoft's purchase of Nokia will benefit other OEMs who license the Windows Phone operating system. Microsoft will continue to license the operating system, even after the Nokia purchase is complete.
  • Myerson claims smartphone manufacturers will still be able to "deliver unique devices at a variety of price points," saying there's a wide range of options in terms of components that will help differentiate offerings from Nokia's devices.

Image via Microsoft

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50 Comments

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I do not understand all the haters of this deal. If MS new CEO can be a tech wizard and execute a plan this will be a winner for MS. I think Microsoft's only mistake is that they did not license the Nokia name for 2-5 years for smart phones. If MS can use Nokia talent with design for phones and tablets and sell the products at the right price they will be on something. I think, MS is also going to load Windows Phone on the feature phones starting in 2014 which will be a coup if these users can move to MS Smartphones. The issue for MS is to hire an excellent PR to make sure people get the message.

majortom1981 said,
Anybody know if this includes the pureview tech? the pdf states Microsoft got 8500 patents. is this included in that ?

As I understand it, this was a product of the devices division of Nokia, as such it's part of what Microsoft just bought.

Microsoft Lumia Phones? Say hello to 0% marketshare. Basically Lumia phones were selling on top of Nokia's reputation, people didn't know they were getting an MS operating system.

CygnusOrion said,
Microsoft Lumia Phones? Say hello to 0% marketshare. Basically Lumia phones were selling on top of Nokia's reputation, people didn't know they were getting an MS operating system.

Nonsense. I'd normally come up with some witty retort at this point, but then I'd be plucking baseless "facts" out of the air just like you are, so I'll refrain.

CygnusOrion said,
Microsoft Lumia Phones? Say hello to 0% marketshare. Basically Lumia phones were selling on top of Nokia's reputation, people didn't know they were getting an MS operating system.

What rubbish. What part of WINDOWS phone, do you think people understand?

I'm thinking they will approach it like the Lenovo Thinkpad. The question is how much power does the brand Lumia have over Nokia. I'm hoping there isn't a push to point out the Microsoft part. I hope it is just Lumia that is pushed because surprisingly I've met people who know the name on it's own.

I find it interesting that NOK and MSFT stock charts are basically mirror images. I'm not sure why Microsoft is down so much today after this news. It looks like a good move to me, and I've been reading analysts' thoughts and they are generally positive.

Is it just me or could this have been the end game all along? Was putting elop in Nokia a test of his skillset? I wonder if Microsoft got an option to buy nokia back when the decided to work together. Will be interesting to see how this unfolds. I believe innovation will be the big winner.

meh iPhone is going metro as well.. I suggest you don't buy that as well. I still have a Windows Mobile 6.1 HTC if you want to buy it.

C#Rocks said,
meh iPhone is going metro as well.. I suggest you don't buy that as well. I still have a Windows Mobile 6.1 HTC if you want to buy it.

I haven't owned a single iPhone since they hit the market, I'm not exactly likely to buy one now, iOS7 looks like it was designed by someone on LSD.

Javik said,

I haven't owned a single iPhone since they hit the market, I'm not exactly likely to buy one now, iOS7 looks like it was designed by someone on LSD.

Maybe a retro Nokia phone with a mono screen and snake on it would be more to your liking then Javik.

TCLN Ryster said,

Maybe a retro Nokia phone with a mono screen and snake on it would be more to your liking then Javik.

Why would that be? I have no problem with modern technology, I just have a problem with interface design that looks like it was done by a kid in paint.

Metro is a fast, clean interface with fat removed. Kids in paint draw things like iOS7 not Metro, or the garbled Android.

Dot Matrix said,

He's not going to be CEO. He's already been positioned within Microsoft, where he'll continue working with the new devices business.

You'll have to tell me where you got your crystal ball from Dot, I want one.

In all seriousness though, they haven't made a CEO decision yet. Even if he is indeed to become CEO, they wouldn't just leave him in limbo with no position announced until then, would they?

TCLN Ryster said,

You'll have to tell me where you got your crystal ball from Dot, I want one.

In all seriousness though, they haven't made a CEO decision yet. Even if he is indeed to become CEO, they wouldn't just leave him in limbo with no position announced until then, would they?

No crystal ball, it just makes logical sense that Elop won't be CEO. He'll do better where he can maintain operations with Microsoft's new acquisition.

He is the Favour to become CEO
Also, nothing will be said about anyone getting CEO until the MS and Nokia deal goes through

But, I still have my money on Elop to become CEO ( chances are extremely high IMO )

Can someone confirm once and for all

Nokia Lumia - no, we'll have "Microsoft Lumia" or sth instead
Nokia Asha - yes

If so - that blows.

agtsmith said,
Can someone confirm once and for all

Nokia Lumia - no, we'll have "Microsoft Lumia" or sth instead
Nokia Asha - yes

If so - that blows.


Nokia keeps its name. Lumia is now a Microsoft brand, as is Asha, though Microsoft has a licensing agreement for the latter brand to use the Nokia name.

I sincerely wonder how much sales they will lose because of the "Microsoft" tag instead of "Nokia" before "Lumia". I'm a little turned off already.

agtsmith said,
I sincerely wonder how much sales they will lose because of the "Microsoft" tag instead of "Nokia" before "Lumia". I'm a little turned off already.

Probably not much. It didn't have a big impact when Lenovo bought IBM's PC business, and traditionally similar moves haven't seen major changes.

Anthony Tosie said,

Probably not much. It didn't have a big impact when Lenovo bought IBM's PC business, and traditionally similar moves haven't seen major changes.
Any word on their optics side of things? The camera side of their smart phones is a huge selling point... was/will all of that tech/ip transferred with this purchase?

MrHumpty said,
Any word on their optics side of things? The camera side of their smart phones is a huge selling point... was/will all of that tech/ip transferred with this purchase?

Of course it will. The camera tech is a product of Nokia's devices division, which Microsoft bought.

@Anthony But Lenovo retained the Thinkpad brand - which was as strong as IBM. Here Lumia is much weaker than Nokia. So I think it will matter to some extent.

Albert said,
never has there been greater hoopla made over two losers shaking hands.

oh man, call me a loser all you want if that means generating nearly 80billion a year in revenue (and still increasing..)

Lord Method Man said,
Will Microsoft be able to use the ringtone?

Well as the ringtone is a product of Nokia's devices and services division which Microsoft just bought, then I'd imagine so.

I think this COULD be great. If MS continues the current amazing forward movement Nokia is putting into WP, then this could work...however I'm worried they'll get it, go for a year or so...then stagnate =/ MS is pushing WP development, but not as hard as they should be.

Also...bit worried for Nokia, I feel they will lose a lot of "public presence".

I think you're right but I'm feeling much more positive about the move because Microsoft will be motivated by competition. As long as Microsoft is losing to Apple/Google, Microsoft will be fighting to gain an equal or greater share of the market. So, stagnation won't become a problem until they dominate but even if Microsoft dominates mobile it does not necessairly mean they have not leared from the past. If that were true, the XBox platform would we knee deep in an outdated platform with an old interface and no Kinect.

As far as Nokia, there is nothing wrong with losing public presence. IBM, Oracle and many other businesses do very well without being in the public eye. It all depends on the services Nokia will offfer after the deal goes through.

Very much looking forward to this. This is a huge step forward for both companies, and can really put Windows and Windows Phone on the map.

Agreed Dot. I let out a loud, "wow, that's ace news!" at work today when I read about this, everybody started looking at me funny

So MS will not be able to use the Nokia brand on Lumia devices ... shame as I think the brand itself was a huge boost for Lumia sales (at least in Europe and Asia), and was key to the 8% market share in Europe. I don't think Microsoft Lumia will be as powerful.

dopydope said,
So MS will not be able to use the Nokia brand on Lumia devices ... shame as I think the brand itself was a huge boost for Lumia sales (at least in Europe and Asia), and was key to the 8% market share in Europe. I don't think Microsoft Lumia will be as powerful.

You need to re-read again. till next 10 years, they CAN use "Nokia" brand name.
By that time, it could be Lumia or Surface what every1 will be talking about

The official announcement says they can use the Nokia brand to sell _featurephones_ for 10 years.
The article confirms it : "The Lumia and Asha brands will be owned by Microsoft when the deal closes, though Microsoft will license the Nokia name to sell the latter devices"

So they will be able to use the Nokia Asha brand, but NOT Nokia Lumia, only Microsoft Lumia.

dopydope said,
The official announcement says they can use the Nokia brand to sell _featurephones_ for 10 years.
The article confirms it : "The Lumia and Asha brands will be owned by Microsoft when the deal closes, though Microsoft will license the Nokia name to sell the latter devices"

So they will be able to use the Nokia Asha brand, but NOT Nokia Lumia, only Microsoft Lumia.

Sad. I also believe the Nokia brand was a boost to sales.

interesting also it says Elop will take the helm on devices at Microsoft after the deal closes, does that mean he'll take Julie Larson Green's post instead of being a ceo of Microsoft because I think his stern leadership is what Microsoft needs in a ceo.