Microsoft to Acquire Nokia Handset Unit

Microsoft is set to acquire Nokia’s mobile business unit in a deal worth $7.2billion. This is Microsoft’s recent effort to position itself strongly in the smartphone market. This deal covers substantially Nokia’s entire phone unit and licensing of its patents.

Ballmer and Elop said in a joint statement, “Today’s agreement will accelerate the momentum of Nokia’s devices and services, bringing the world’s most innovative smartphones to more people, while continuing to connect the next billion people with Nokia’s mobile phone portfolio.”

The deal involves Elop joining Microsoft again as executive Vice president of the new mobile business division as well as other key members of his team at Nokia. Elop said in a statement, “Building on our successful partnership, we can now bring together the best of Microsoft’s software engineering with the best of Nokia’s product engineering, award-winning design, and global sales, marketing and manufacturing.”

Outgoing Nokia CEO, Stephen Elop, has ensured that Microsoft maintained a close relationship with Nokia during his 3 year stay. This was evident when Microsoft released its Windows phone OS on the Lumia brand in 2012 in a bid to hold down a place in the smartphone market being largely over-ridden by Google’s Android in recent times. HTC and Samsung also run the Windows OS on some of their product versions.

Elop has been touted as a possible replacement to Ballmer after the latter announced his retirement in August. This is surely a possibility as Ballmer’s reform agenda is to make the software giant a formidable force in the mobile phone market and not only reliant on personal computers.

Even with this new deal, Microsoft still insists that it’s 100 percent committed to its manufacturing partners. Ballmer made the remark to quickly reassure other phone makers of Microsoft’s continued support.

Nokia had its 4o percent share of the handset market in 2007 reduced to a mere 15 percent in recent stats and just about 3 percent share in the smartphone sphere. This deal intends to change those numbers in their favor.

It is obvious that the game is now even with the big players in the mobile phone industry as financially-ailing BlackBerry has its own software and hardware, Apple producing its own iOS, Google, even with the Android software well spread on several smartphone brands, also now manufactures through its 2010 Motorola acquisition, and Microsoft, the Windows OS maker, now joins the competing fray with the Nokia mobile unit deal.