Gone as Microsoft successfully usurped Nokia into its blood stream. Paid $7.1 billion for it
Tuesday, 03 September 2013
Microsoft said it has reached an agreement to acquire the handset and
services business of Nokia for more than $7.1 billion, in an effort to
transform Microsoft’s business for a mobile era that has largely passed
In a news release late Monday night, Microsoft and Nokia said 32,000
Nokia employees will join Microsoft as a result of the all-cash deal.
Stephen Elop, the chief executive of Nokia and a former Microsoft
executive, will rejoin Microsoft, setting him up as a potential
successor for Steven A. Ballmer, who has said he will retire as chief
executive of Microsoft within 12 months after a successor is
found, writes the new York Times.
Elop and Fomer MS boss in 2010 as MS started its bite into Nokia / Scancomark.com
“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,” Mr. Ballmer said in a statement. “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.”
Finland-based Nokia was once the mightiest company in the mobile phone
business, but it has fallen out of place as the industry shifted to the
era of the smartphone.
Nokia says the operations that will be transferred to Microsoft had a
turnover of some 14.9 billion euros last year. As part of the deal,
Microsoft will sign a contract to license Nokia’s mapping service, the
new your times add, writes Finnish national broadcaster, Yle.
According to Yle, Nokia headquarters will remain in Finland. Also Risto
Siilasmaa, who founded the F-Secure technology security business, will
take the reins as interim head of Nokia.
Tuesday's sale announcement marked the culmination of a recovery programme spearheaded by chief executive Stephen Elop.
The former flagship of Finnish industry and innovation announced the
appointment of the Canadian and former Microsoft senior leadership team
member to lead the recovery of its flagging fortunes back in September
In 2011, the now-infamous "burning platform" memo sent to staff by Elop
was leaked. In it Elop warned that the company would have to undertake
drastic measures to return to competitiveness.
One of those recovery strategies involved abandoning Nokia's
proprietary Symbian mobile phone platform and migrating its smartphones
to the Windows Phone software in an attempt to recover lost ground in
the smartphone market. As part of the deal, Microsoft pumped one
billion dollars into the company to help with marketing the new
The company also engaged in a series of large-scale restructuring
and staff cuts in an effort to rein in costs and shore up its cash
However Nokia has seen its market share and market value slide since
the start of Elop's tenure, and the company was dethroned by Samsung as
the king of the mobile handset last year.
Following the news, by 10.30 Tuesday morning Nokia's share price
climbed by about 1.20 euros to 4.22 euros on the Helsinki stock
Reporting compiled from News York Times and Yle, Finland