Light Reading

Microsoft Officially Closes Nokia Buy

Sarah Thomas
4/25/2014
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Nokia's devices division is now officially part of Microsoft, wrapping up a deal first announced last September and giving Microsoft its own device business for its Windows Phone operating system.

Microsoft Corp. (Nasdaq: MSFT) confirmed it has completed its more than $7 billion acquisition of the Finnish smartphone maker on Friday, enabling it to "accelerate its share of smartphones and feature phones in developed and emerging markets, and increase its role as a devices and services company." (See Nokia Sale to Microsoft Expected to Close This Week, Euronews: Nokia Handsets Sale Delayed and Nokia: It's Really Happening.)

Nokia said in a release that the total transaction price is expected to be slightly higher than the previously announced €5.44 billion ($7.52 billion) after final adjustments have been made.

The two companies first became partners early in 2011. Even though Microsoft has licensing deals in place with others such as Samsung Corp. and High Tech Computer Corp. (HTC) (Taiwan: 2498) -- deals it hopes to continue -- Nokia already accounts for 90% of the Windows Phone devices on the market.

In addition to its phone business, the software giant is acquiring Nokia's design team, most of its manufacturing and assembly facilities and operations (minus manufacturing plants in India and South Korea now excluded from the deal), and sales and marketing support. It will also license its patents.

According to Tom Gibbons, the Microsoft corporate vice president who is responsible for the Nokia integration, the combined company already has a joint operating plan established and Nokia feature phones will start to have more Microsoft services on them right away. It is targeting growth in emerging markets where Android dominates.

Microsoft didn't delve into other specific plans for Nokia, but a leaked letter suggests it will be leaving behind the once iconic Nokia name in favor of "Microsoft Mobile."

Nokia is also expected to announce Rajeev Suri as CEO of what's left of the company, including the NSN infrastructure unit, location services business, and its patents, when it shares its first-quarter earnings on Tuesday.

— Sarah Reedy, Senior Editor, Light Reading

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Joe Stanganelli
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Joe Stanganelli,
User Rank: Light Sabre
5/8/2014 | 8:27:52 AM
Re: the name
> *tech elite in Europe and Asia follow the tech elite of Americas*

Relevant xkcd.

Besides, that statement, however true, became less true after the Snowden revelations -- when Europeans, South Americans, and others fled the American cloud like it was a burning movie theater.
Joe Stanganelli
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Joe Stanganelli,
User Rank: Light Sabre
5/8/2014 | 8:25:28 AM
Re: the name
The eBay/PayPal comparison is really apt here.  In eBay's case, PayPal was making tons of money off of eBay, so may as well buy PayPal and make that money that eBay should have been making in the first place.

Ditto for Microsoft/Nokia, perhaps.  Windows phones are Nokia phones, so why not make ALL of the money on the table for Windows phones?  At least, if the ROI is right.
nasimson
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nasimson,
User Rank: Light Sabre
5/2/2014 | 9:43:16 AM
Re: the name
@Joe: In terms of technology trends, tech elite in Europe and Asia follow the tech elite of Americas, so I am not sure how gaining market share in Asia will help gaining market share in America. Or am I missing something here?
briandnewby
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briandnewby,
User Rank: Light Sabre
5/1/2014 | 4:31:17 PM
Re: the name
Joe, I don't know who I would buy.  I think they'd be better off assembling their own, ala Amazon.

The only thing I can get to is that the intellectual property must have had great value.  

The other thing to consider, I guess, aside from the international thought is simply the new idea of new market space for devices.  Microsoft could leverage all of this into some new Internet of Things concept that creates new value and makes Microsoft look visionary.

Of course, that's what analysts wondered when E-Bay bought PayPal.
Joe Stanganelli
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Joe Stanganelli,
User Rank: Light Sabre
4/30/2014 | 11:03:03 PM
Re: the name
Interesting (and obscure -- which always makes for interesting) example, brian!

In any case, Microsoft has clearly been in the market for a mobile company... My anti-Nokia sentiments aside, who better to buy than Nokia if you're Microsoft?
Joe Stanganelli
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Joe Stanganelli,
User Rank: Light Sabre
4/30/2014 | 10:59:55 PM
Re: the name
OTOH, when all you read (and I'm not making this assumption of you, but I'm assuming it's true of many visitors here) are American-based tech news sites, then yes, eventually you start to believe that Microsoft is the devil; that Mark Zuckerberg does horrible, disgusting things with the world's personal data in the middle of the night; that every Google product ever is a new Wonder of the World; and that Steve Jobs was the best person ever except sometimes when he was the worst person ever.
pcharles09
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pcharles09,
User Rank: Light Beer
4/30/2014 | 5:45:06 PM
Re: the name
I would actually disagree with that. I think people have already soured on the 'Windows' mobile & pphone moniker. Microsoft in the name wouldn't make too much of a shift in my mind.
briandnewby
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briandnewby,
User Rank: Light Sabre
4/30/2014 | 12:44:03 PM
Re: the name
I do agree about the international opportunities.  I'm not convinced that the Nokia purchase will help Microsoft there.  It may.  Diebold, for instance, got into the voting machine business by buying an equipment company in Brazil and hoped to transfer that to the United States, only to find the technology wasn't robust enough.  Diebold then bought Global Election Management for the current voting machines in use and has since sold that business for nearly nothing.

That's only one, and rather odd example, and it illustrates the technology coming this way and not that way, internationally, but overall I think buying domestic equipment to create an international beachhead is risky as well.
nasimson
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nasimson,
User Rank: Light Sabre
4/30/2014 | 12:06:41 AM
Re: Nokia's Indian plant
harles: China and Vietnam makes sense. However India is imposing certification requirements on consumer electronics: www.enterpriseefficiency.com/author.asp?section_id=2405&doc_id=272965& This would raise difficulty for phones manufactured in Vietnam and China to be readily sold in India.
Joe Stanganelli
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Joe Stanganelli,
User Rank: Light Sabre
4/29/2014 | 11:19:30 PM
Re: What's in a name?
Microsoft Bing : Google Search :: Google Buzz : Twitter

Except Bing Maps is better than Google Maps (at least, since Google "updated" its Maps platform).
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