Microsoft has purchased Nokia’s devices and services unit, bringing the Lumia lineup under the Redmond roof. The move unites Windows Phone 8 with its biggest hardware supporter, giving the company the integrated mobile offering it’s been looking for with Surface and other devices. When the deal closes in the first quarter of 2014, Microsoft will pay €3.79 billion for Nokia’s business, plus another €1.65 billion to license its portfolio of patents. 32,000 people are expected to transfer from Nokia to Microsoft, including 18,300 that are “directly involved in manufacturing.”
The purchase comes on the heels of what appeared to be a failed acquisition in June, at which point it seemed conversations had broken off entirely. Now the two come together, in what outgoing Microsoft CEO Steve Ballmer called “a bold step into the future.”
A driving force behind the sale seems to be Nokia’s low-end Asha brand, which Microsoft has acquired outright. Asha gives Microsoft a far larger footprint for Windows Phone, and access to millions of customers in developing countries that it plans to use as an “on-ramp to Windows Phone.” The emphasis also lends some credibility to the notion that Nokia’s high-end strategy isn’t working — analysts predicted a horrific Q3 for the company, and its struggles to find a foothold are well-documented. In fact, Microsoft’s licensing deal for the Nokia brand doesn’t include future Lumias — Nokia as a smartphone brand is effectively dead, as Microsoft takes the lineup in-house.
Though Nokia was by leaps and bounds Microsoft’s best hardware partner for Windows Phone 8, EVP of operating systems Terry Myerson was careful to note that Microsoft’s purchase doesn’t come with nepotism. As Google has with Motorola, Myerson promised every partner would be treated the same, even quoting a song by The Killers to make his point. And from Huawei to HTC, there are still other partners — Nokia’s coming in-house, but Windows Phone 8 isn’t being walled off.
- Microsoft: Nokia kept some of its Lumia hardware features secret from us (neowin.net)
- Nokia kept secrets from Microsoft over its Windows Phone plans (theverge.com)
- Microsoft Purchases Nokia’s Device and Services Division to Unite Windows Phone Hardware and Software (macrumors.com)
- Even with its purchase of Nokia, Microsoft won’t forget its Windows Phone partners (phonearena.com)
- Microsoft’s Nokia Deal by the Numbers (allthingsd.com)
- Microsoft: This is why we bought Nokia (wpcentral.com)
- Microsoft purchases Nokia for $7.2 billion (digitaltrends.com)