Microsoft buys Nokia handset biz for $7.2 billion

3rd September 2013 | By Mouseworld Now Correspondent |

Microsoft-buys-NokiaNew Delhi, India, September 3, 2013:  In what’s perceived as the greatest power shift in the digital world and strongest of all disruptive buy-outs, software giant Microsoft has bought out one time market leader and now ailing mobile phone firm Nokia. Nokia has agreed to sell its main handset business to Microsoft for 5.44 billion euros.

The Finnish giant will continue as a maker of networking equipment and holder of patents. At one time, the handset maker was the most dominant handset manufacturer in the world. It was later overtaken by Apple and Samsung in the red-hot powerful smartphones market.

Nokia’s Canadian boss Stephen Elop had run Microsoft’s business software division at one point of time before he joined Nokia in 2010. Elop will return to Microsoft as head of its mobile devices business.

Buzz has been that Stephen Elop is being considered as a possible replacement for Microsoft’s CEO Steve Ballmer who will retire soon. Balmer is credited to transform Microsoft into a gadget and services company like Apple.

Nokia saw its market share collapse and its share price shrivel during Elop’s tenure.

In 2011, Elop decided to use Microsoft’s Windows Phone for smartphones, rather than Nokia’s own software or Google’s Android os.

A company which had a 40 percent share of the handset market in 2007, now has a mere 15 percent market share, and a smaller 3 percent share in smartphones.

The sale of the handset business for the 148-year old company was felt as a hard blow in its native Finland, even among hard-nosed investors who saw the sale as a final chance to salvage value.

Microsoft, which has huge revenues from its Windows computer operating system, Office suite of business software and the X-Box game console, has failed to set up a profitable mobile device business so far. It’s own mobile gadget, the Surface tablet, has not got a good response from the market too since it was launched last year.

“It’s a bold step into the future – a win-win for employees, shareholders and consumers of both companies,” Ballmer said in a statement. “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.”


© Mouseworld Now News Service

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