Microsoft Buys Nokia Phone Division To Make Smartphones In House


Microsoft CEO Steve Ballmer presenting the Nokia Lumia 920 last fall (Getty)

Early Monday morning, Microsoft announced that it has bought Nokia’s hardware division for $7.2 billion in cash. The deal breaks down to 5 billion directed towards buying Nokia’s Devices & Services Unit while 2.2 billion was aimed at acquiring the series of patents Nokia owns allowing Microsoft to license that portfolio for 10 years. The Nokia Lumia brand is now housed directly under Microsoft’s roof as both companies have worked together for a number of years.


Both companies have worked together before but this acquisition places Nokia directly under Microsoft’s control. This was one of the new Nokia phone’s announced last fall (Getty)

The Silicon Valley legend will add 32,000 employees as a requirement of the new merger.
Stephen Elop, the former head of Nokia, will rejoin Microsoft after he left it two years ago to work for the Finnish smartphone maker. Predicted as a possible replacement for Ballmer, Elop’s reputation as a manager was lackluster as Nokia’s market share withered during his tenure.

While Ballmer led the charge for an acquisition last June, Microsoft explained why this purchase succeeded. Engadget reports that the rationale for this was that the Nokia Lumia line has tremendous potential to increase its smartphone share compared to the huge hold its competitors have in this particular market as well as protect Microsoft’s future as Ballmer’s actions have ruined the reputation of a once prominent firm. The partnership is supposed to take full effect in 2014 as Ballmer begins his succession plans.