Nokia Devices and Services becomes part of Microsoft

Rebecca Gibson
Rebecca Gibson
By Rebecca Gibson on 25 April 2014
Nokia Devices and Services becomes part of Microsoft

Nokia Devices and Services has officially become part of Microsoft after the two companies finalised an acquisition agreement on 25 April 2014.

Approved by Nokia shareholders and governmental regulatory agencies around the world, the acquisition marks the first step in the two companies working as an integrated team. The integrated business will be referred to as Microsoft Mobile Oy.

“Today we welcome the Nokia Devices and Services business to our family,” said Microsoft CEO Satya Nadella. “The mobile capabilities and assets they bring will advance our transformation. Together with our partners, we remain focused on delivering innovation more rapidly in our mobile-first, cloud-first world.”

Through the acquisition, Microsoft aims to boost market adoption of Windows Phone, which the IDC Worldwide Quarterly Mobile Phone Tracker identified as the fastest-growing platform among the leading operating systems in 2013. According to IDC, Windows Phone recorded 91% year-over-year gain and was one of the top three smartphone operating systems in the fourth quarter of 2013.

Working closely with hardware partners, developers, operators, distributors and retailers, Microsoft also aims to leverage the Nokia mobile phone business to target the affordable mobile devices market – a US$50 billion annual opportunity.

Former Nokia president and CEO Steven Elop will serve as executive vice president of the Microsoft Devices Group and report directly to Nadella. In his new role, Elop will oversee the company’s devices business, which includes Lumia smartphones and tablets, Nokia mobile phones, Xbox hardware, Surface, perceptive pixel products, and accessories.

Around 25,000 employees and more than 130 sites around the world have transferred to Microsoft. This includes staff from several factories that design, develop, manufacture, market and sell a broad portfolio of smart devices, mobile phones and services.

Both companies have made several adjustments to the original deal – which was proposed in September 2013 – agreeing that Microsoft will manage the domain and social media sites for up to one year. It has also been agreed that rather than all employees within Nokia’s chief technology office continuing to work with Nokia, the 21 China-based employees working on mobile phones will join Microsoft. In addition, Microsoft will no longer acquire Nokia’s manufacturing facility in Masan, South Korea. Nokia will also retain control of its factory in Chennai, India, as the tax liens on Nokia’s assets in India prevented the transfer.

As part of the transaction, Microsoft will honour all existing Nokia customer warranties for existing devices, beginning 25 April 2014.

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