RIP Nokia: Microsoft steps in with £4.6bn buyout

RIP Nokia: Microsoft steps in with £4.6bn buyoutIt's the outcome many were predicting all along, yet the timing comes as a major shock: Microsoft is buying out Nokia's devices and services division in a deal worth £4.6bn.

Nokia boss Stephen Elop is stepping down but will be reincorporated into Microsoft as the deal progresses. But the simple truth is: Nokia and smartphones are finished.

Rumours that Microsoft wanted to buy out Nokia for a leg-up into the smartphone hardware business first surfaced with the ink still drying on the two companies' strategic partnership signed back in February 2011.

Nokia's new CEO Elop, after all, was an ex-Microsoft man, and the decision to drop MeeGo and Symbian and align with Windows Phone was claimed by many to be a Trojan Horse-like move to get an insider past the gates and working to undermine Nokia from the inside.

And while there's no sensible evidence to suggest such a scheme ever existed, it doesn't matter, since the worst fears of those who disagreed with the move to team up with Microsoft have now been realised.

The specifics of the deal see Microsoft paying £3.2bn for Nokia's phone business, and another £1.4bn for a 10-year licence on its patents. Elop is stepping down to assume a new role as executive vice president of devices and services (reporting to new interim CEO Risto Siilasmaa) during the transition.

Once the deal is done, which should be early next year, Elop will take up the role of head of Microsoft's devices team. He'll report directly to outgoing Microsoft CEO Steve Ballmer, and will surely be on the inside track to replace Ballmer when he steps down next year.

Microsoft will take over the Lumia and Asha brands, but Nokia will continue as a company on its own, keeping control of Nokia Siemens Network, the HERE mapping platform (which Microsoft has already agreed to lease for four years), and the Advanced Technologies division which focuses on licensing and development.

Microsoft and Nokia were reportedly talking about a potential buyout just a few months ago, but after those discussions were seen to fall apart, today's developments comes as quite a turnaround.

In the short term, there isn't likely to be much difference in terms of new devices Nokia had planned: they will appear just as before.

But start paying attention to that Nokia badge above the screen, because it won't be there for much longer.

Via Nokia and Microsoft

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JanSt / MOD  Sep. 3, 2013 at 18:11

I thought the patent issue was more of a ten year 'lease' type of thing?

Anyhoo. I don't see the timing as particularly shocking. Well, Microsoft buying anything is shocking at all times, I guess :p

I think a few people here and elsewhere predicted exactly THIS outcome in 2010. And the fact that Elop's name crops up as a Ballmer replacement proves to me that THIS OUTCOME was his mission! BECAUSE if it wasn't, he'd be a horrible CEO. He did what he was supposed to do. You can call me conspiracy theorist. Beats gasbaggy dreamer anyways!

Nokia is dead now. The name will live on - like Zune, Kin, webOS. Heck, WP may succede - but not with my bucks. Pooooof.

martinjjames / MOD  Sep. 3, 2013 at 18:47

I thought the patent issue was more of a ten year 'lease' type of thing?

Ah, yeah I missed that. Corrected in the story, thanks :)

And yes, largely agreed on all points. Except the gasbaggy dreamer bit, obv :p

Stelph  Sep. 4, 2013 at 10:23

I thought the patent issue was more of a ten year 'lease' type of thing?

Anyhoo. I don't see the timing as particularly shocking. Well, Microsoft buying anything is shocking at all times, I guess :p

Not particluarly shocking as you say, but suspiciously bold. As soon as Balmer announces he is stepping down (and apparently is pushed out), and just when people are saying there isnt a replacement CEO, MS then swoops in and buys out Nokia netting themselves a high Quality and respected devices maker and also a new CEO candidate to boot. Anyone who argues there is no connection is seriously deluded IMO

JanSt / MOD  Sep. 4, 2013 at 12:10

"As soon as Ballmer steps down..."...
Numero Uno: A few "unnamed" Microsoftians and outsiders are certain Ballmer was fired.

Two) as soon as... Those giant corporations have long term strategies. Nokia had to find a niche and perfect it. The camera. Only thing that distinguishes a €600 phone from a €90 one.
That takes time. Look at BB, HP, Palm or early Android...
M$ are often wrong, but that don't make them stoopid.
Mobile was the next big thing, that was obvious...
Everything else (xbox aside) Ballmer screwed up. Elop did his job well - for M$.


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