Stop Press. Nokia Devices & Services business sold. To Microsoft. Finally.

Nokia-NextChapter

This has been a contentious subject the last couple of years, but all controversies have been finally laid to rest. Nokia has announced that it has signed an agreement to enter into a transaction whereby “Nokia will sell substantially all of its Devices & Services business and licence its patents to Microsoft for EUR 5.44 billion in cash”.

This is official, so you can take it to the bank.

Nokia. Elop. Microsoft. Tomi Ahonen. Etcetera, etcetera. It has finally happened. History just got made.

What’s the deal?

Here are details of the transaction:

Microsoft will acquire substantially all of Nokia’s Devices & Services business, including the Mobile Phones and Smart Devices business units as well as an industry-leading design team, operations including all Nokia Devices & Services production facilities, Devices & Services-related sales and marketing activities, and related support functions. At closing, approximately 32,000 people are expected to transfer to Microsoft, including approximately 4,700 people in Finland. Nokia’s CTO (Chief Technology Office) organization and patent portfolio will remain within the Nokia Group. The operations that are planned to be transferred to Microsoft generated an estimated EUR 14.9 billion, or almost 50%, of Nokia’s net sales for the full year 2012.

As part of the transaction, Nokia will grant Microsoft a 10 year non-exclusive license to its patents as of the time of the closing, and Microsoft will grant Nokia reciprocal rights related to HERE services. In addition, Nokia will grant Microsoft an option to extend this mutual patent agreement to perpetuity. Of the total purchase price of EUR 5.44 billion, EUR 3.79 billion relates to the purchase of substantially all of the Devices & Services business, and EUR 1.65 billion relates to the mutual patent agreement and future option.

Additionally, Microsoft will become a strategic licensee of the HERE platform, and will separately pay Nokia for a four year license. This revenue stream is expected to substantially replace the revenue stream HERE is currently receiving from Nokia’s Devices & Services business internally. If the transaction closes Microsoft is expected to become one of the top three customers of HERE.

Say goodbye to Nokia the mobile manufacturer

Nokia as a brand will continue to exist, but not as a mobile manufacturer. They will continue to focus on:

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– NSN, network infrastructure and services;
– HERE, mapping and location services; and
– Advanced Technologies, technology development and licensing.

Nokia will retain its headquarters in Finland. Excluding the approximately 32,000 people planned to transfer to Microsoft, Nokia would have employed approximately 56,000 people at the end of the second quarter 2013.

Tomi Ahonen was right, but I disagreed with him on the point that this was all Elop. As far as I am concerned, the Nokia board was in on the act right from the get-go. They brought him in deliberately to make this happen. It is the reason why they wouldn’t remove Elop. And that was why regardless of what any of us screamed or said, the deal was going to happen. End of.

This is the end of Nokia the mobile manufacturer. Say Hello to Microsoft, the hardware manufacturer. Microsoft finally joins Apple and Google at that table, owning the garden end-to-end. Ladies and gentlemen, all hell just broke loose in the mobile sector. I’m going back to bed for now. Kick up a storm in my absence please.

Meanwhile, all those of you who have been dreaming of an Android-powered Nokia smartphone…..you can wake up now. It is never happening.

PS1: Microsoft needs to keep the “Nokia” brand on their phones. To phone consumers, Microsoft is an unknown name. But mention Nokia…

PS2: What happens now to Asha…?

PS: What will the reaction of other Windows Phone smartphone manufacturers be?

Source

Mister Mobility

I started blogging about mobile in 2004 as a fun way to share my passion for gadgets and mobile services. My other interests include digital media, speaking and teaching, photography, travelling, and dancing.

0 thoughts on “Stop Press. Nokia Devices & Services business sold. To Microsoft. Finally.

  • September 3, 2013 at 7:01 am
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    It’s over. I don’t see Microsoft continuing the Asha series or even does small torch light phones. it’s death to feature phones. if elop was sent in to kill belle and meego, once they buy Nokia, out goes S40 et al.

    I saw this coming, and wasn’t shocked.

  • September 3, 2013 at 7:18 am
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    Alas my first mobile love is gone !!!!! I knew this was bound to happen sooner of later, aleast Nokia was smart enough to sell early their hardware while it was still worth something online their big brother RIM. Will miss them though, it’s just kike yesterday when I saw my first Nokia Symbian advert Nokia 6600 or who can forget N91 their music Phone.

  • September 3, 2013 at 9:16 am
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    I don’t think any mobile enthusiast was really surprised by the news. What I do want to know is, will future lumia devices carry the “Nokia” brand? Also, what does the future hold for Asha devices, especially the new series beginning with the 501, and how about the beloved torchlight phones?

  • September 3, 2013 at 9:40 am
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    // Meanwhile, all those of you
    who have been dreaming of
    an Android-powered Nokia
    smartphone…..you can wake
    up now. It is never
    happening.//

    Well, I have learnt never to say NEVER (wait, I just said never o..)

    Anyway…

    There could still come a day Google would buy up Microsoft.

    Can’t happen? Who ever imagined a thing like this could ever happen to Nokia… just six year ago?

    Besides, what’s the noise about this Purchase of Nokia?

    Nokia under Elop.. with Microsoft dollars suppprt.. did not make a lot of splash in the mobile ocean. Why do we think it would make any difference with Elop basically heading up the two merged companies? Same guy, same workers.

    On paper, a software giant like Microsoft merging with a hardware expert like Nokia should be a brilliant combination… made in heaven.

    But then, MICROkia is horribly late to the party, and the current leaders are not slumbering either.

    It will be interesting to see how the teeming former alienated customers of Nokia would react to this.. in terms of patronage .

    I know my reaction is.. so what ?

    The only thing that has changed now is that there is abundance of cash to push the Nokia end of things. Funding for research, etc is now ‘limitless’.

    Alas, if cash was the solution!

    Apart from cash, what other leverage exists for the acquired Nokia.. now?

    Is an overflowing cash vault even an advantage here, seeing that the Google, Samsung and Apples are not exactly cash_strapped, too, and also have equally gifted talents in their Manchester?

    Let’s keep watching…

  • September 3, 2013 at 1:48 pm
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    Hmm, we live in exciting technology times.

    Good thing is that Microsoft has confirmed both Lumia and Asha trade names will be retained under Microsoft, but there will no longer be any phone called Nokia.

    And that’s a witty one, Eyebeekay. Microkia.

    Microsoft was actually afraid of Nokia going Android, hence the surprise acquisition. If Microsoft had not acted fast, Huawei would have acquired Nokia and turned it into an Android brand. Then Windows would go downhill, with Microsoft unable to catch up with Google and Apple.

    But I think Microsoft should have paid far more than €5 billion for Nokia, considering that Google paid $12.5 billion for Motorola. Is Motorola more valuable than Nokia?

  • September 3, 2013 at 11:14 pm
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    Microsoft is beginning to respect Africa hence Asha clan wouldbe retained

  • September 4, 2013 at 8:25 am
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    @eyebeekay …I actually prefer Nokiasoft 🙂

    Well, this definitely signals the end of the Asha range, thats for certain..and most probably the ‘Nokia’ name will drop from all Lumia devices. I guess the main reason the Lumia 520 has been touted to be a great budget phone is for a time such as this: to prove that the Lumia (i.e. Windows 8 OS) can thrive on ‘budget’ devices and be a winner.

    I sure expect more budget devices to be churned out pregnant with the windows 8 OS…this is the future of Microsoft, the hardware manufacturer; sayonara Nokia *insert mournful dirge here*

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