Microsoft buys and licenses the parts of Nokia mobile that matter, but will it make any difference?

Microsoft buying Nokia's devices and services business, licensing maps

Microsoft has just announced that they'll be buying Nokia's devices and services business, as well as licensing their patents and maps. Microsoft will pay close to $5 billion for the business, and almost $2.2 billion in licensing for the deal. It'll be paid out of their overseas cash reserve, which spares them the cost of repatriation. Stephen Elop, Jo Harlow, Juha Putkiranta, Timo Toikkanen, and Chris Weber will likely transfer to Microsoft. In Elop's case, he'll be returning to Microsoft. Here are the comments from Microsoft's release:

“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,” said Steve Ballmer, Microsoft chief executive officer. “In addition to their innovation and strength in phones at all price points, Nokia brings proven capability and talent in critical areas such as hardware design and engineering, supply chain and manufacturing management, and hardware sales, marketing and distribution.”

One of the key reasons, according to John Paczowski at AllThingsD was:

  • To prevent Google and Apple from foreclosing app innovation, integration, distribution and economics


So, Elop as the new Microsoft CEO? Nokia making integrated, proprietary phones and tablets (please don't call them "Windows Phones")? It's hard to see how the ultimate product will be substantially different from, or more successful than what they're offering now, but if Microsoft is to maintain relevance in the consumer mobile computing space, it'll have to be. I very much hope this succeeds for both companies. A lot of questions remain, however. Will it become more of an Apple model, or more of a Google + Motorola model? Will Microsoft be able to unify their efforts behind Nokia hardware any better as first party than third? Where's my Xphone and Xslate with Halo, Project Gotham, Gears of War, Office, Exchange, Sharepoint, Azure, and all their other killer features, with no Windows in the way?

Source: Microsoft via Windows Phone Central

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Rene Ritchie

EiC of iMore, EP of Mobile Nations, Apple analyst, co-host of Debug, Iterate, Vector, Review, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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Reader comments

Microsoft buys and licenses the parts of Nokia mobile that matter, but will it make any difference?


Nokiamen and Microsoftmen need each others' loins to succeed in a world anew. Their old bosses need to step back and out and let their new lovechild carry itself forward. Not all new species live long but this one has a lot in their folio, and the corporate droids love the BillCo.

Nokia owns, and operates as a separate company Navteq - a major player in Map data for GPS receivers and apps... will be interesting to see if Navteq is part of the deal, or if Nokia keeps it and Microsoft gets licensing for Navteq's products.

Interesting, so does Nokia stop making the odd non Windows phones now? I'll be watching to see how this plays out for both companies.

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If you read the full post on wpcentral, you will see the Asha line of phones are part of the deal. Whether they will still be made afterwards or not is unknown. The mapping part aka HERE and Navteq, stay with Nokia. But Microsoft has setup a licensee deal with Nokia's mapping unit for 4 years as a premier partner. I am all for iOS, but at the moment on a Nokia WP8 phone at the moment. I would like to see how this plays out and hope it makes MS and WP8 a better system, more uniform like iOS and who knows, it might pay off big. Just have to wait until beginning of 2014 to see the new phase of MS with the old Nokia phone unit. Just don't know if HTC or Samsung want to continue with using WP8 or not.

"…but will it make any difference?"

No it won't. Both companies are pretty much done and over with in the mobile space. I think it's to late for either to make any further headway in the mobile market space. Sooner or later both will be done and out.

Elop retrieving to MS in any capacity is a giggle. He totally effed up Nokia and now somebody, somewhere…thinks hell be something for MS?!?!

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Agree. $7.2 billion is too much to spend on a mobile segment exit strategy.
Add the billions that Nokia will lose over the next few years and you have a
perfect recipe for disaster. (Nokia lost something like $5 billion last year.)

But who knows? Maybe Microsoft is planning ahead for a massive write-down
on future Windows Phones. They way they wrote down $900 million on Surface.
I'm sure they have a pretty good tax law department.

re: "So, Elop as the new Microsoft CEO?"

Looks like it. Also, Microsoft buying Nokia is the only way to keep
"Windows Phones" on the market. Isn't it?

Will it make a difference?

No. Sorry Apple fans, but I think Nokia still makes the best hardware on the planet, they just couldn't get their crap together to make a solid UI for it. Microsoft's problem isn't the hardware (Nokia's) that they've been using, it's the crappy software that no dev's want to code for. I don't see that changing in the next 2-4 years.

Not 100% sure about quality. Don't know if you owned a Nokia phone recently but a friend of mine just got his exchanged for the 5th time. Creaking sounds, dust in the camera, etc ..
Looks like he's not alone -

It's really bad for Nokia as they were known for stellar hardware.

Good decision, Nokia's excellent hardware doesn't deserve the pathetic Lagdroid filled with malware in play store and Nokia patents are actually dangerous unlike useless Motorola ones.

Interesting, I remember back in June when Microsoft almost bought Nokia it seemed that it was almost as if that had been the plan all along, but then it fell through.

Now, to resurface and actually happen, no surprise, though I am sure will make for interesting chatter about the new MS CEO.

Still, I think for MS it is not a bad decision. Nokia (well, of course can’t call them Nokia now; part of the deal means the smartphones can’t be called Nokia) makes nice phones, and this will give MS an in-house fully integrated mobile solution.

Time shall tell, as the market continues to coalesce.

Wow, I would love to see the faces at the next shareholders meeting.
Like, "WTF were you thinking?"
Like trying to re-invent string.
Too late to the party M$.

Yes this is a stepforward, not only for Nokia and MS, but for the market as whole. We need the competition and this is exactly what we will be getting.
Nokia has always made solid hardwares. They needed a boost for their sales and marketing in North America and this will give them just that !