The Quotes are Powered By Forexpros, the Forex, Futures, and Stock Markets Portal.

Companies News

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 it by.

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.
NokiaElop 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 2010.

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 Windows-based handset.

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 position.
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 exchange.
Reporting  compiled from News York Times and Yle, Finland

Print Friendly and PDF