Microsoft to Aquire Nokia Devices & Services

Proudly Using the Nokia Lumia 928

Nokia, once a world leader in the mobile phone market, has had a tough few years and attempts by the company to join in on the smartphone explosion did not go well.

Nokia has seem somewhat of a resurgence lately with a series of high quality smartphones on the Windows Phone platform. Many of the phones such as the Lumia 928, 928 and 1020 with it's 41 megapixel are excellent devices and offer a real choice for anyone wanting to escape the ecosystems of Apple and Android. In fact the majority of users who actually try their Windows Phones quickly find that they enjoy the very different experience they have had with their previous smartphones. The problem for Nokia and Microsoft was getting users to even think about separating from their iPhone or Android device.  

Although there is no question that the Nokia devices are excellent Nokia has continued to struggle and the answer, suggested by current chief executive and former Microsoft employee Stephen Elop, was to ditch its own-brand software and license in someone else's, and to no surprise, Elop chose Windows Phone from his former paymaster. Entering into a tight relationship with Microsoft, Nokia launched the Lumia family of Windows Phone devices, the first Nokia phones ever to come with a non-Nokia operating system.

That turns out to have been a very smart move: Nokia's market share, which had been sinking, has begun to rise as buyers began to pick up the aggressively-priced and feature-rich Lumia devices. It also, however, gave Microsoft considerable control over the future of the company - control it is now exercising by acquiring Nokia's entire mobile division in a multi-billion deal.

'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,' claimed Steve Ballmer, Microsoft's outgoing chief executive, of the deal. '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.'

The deal will see Microsoft taking full control over Nokia's Smart Devices and Mobile Phones business units, which produce the Lumia family of smartphones and low-cost featurephones respectively. Nokia, meanwhile, retains its telecommunications hardware business Nokia Siemens Networks, Here location-based services arm, and its patent portfolio under the Advanced Technologies division. These patents are to be licensed to Microsoft for at least a ten-year period, the agreement states.

 The acquisition will truly allow  Microsoft to enter the market in direct competition with its Windows Phone licensees. It's a move that was first telegraphed by the launch of the Surface family, which put the company in direct competition with third part manufacturer's in the Windows 8 and Windows RT tablet markets.

Nokia first started producing phones back in 1996 and for many years they were one of main innovators of smartphones. Of course the release of the iPhone in 2007 and the emergence of Android devices began to strangle Nokia. During the past couple of years Microsoft has provided a kind of life boat to Nokia with their Windows Phones and now it looks like Microsoft has taken over the reins entirely.

Time will tell for both Nokia and Microsoft, but at this very early point I believe it is a good move for both companies and consumers.