Microsoft Purchases Nokia's Device and Services Division to Unite Windows Phone Hardware and Software

Microsoft and Nokia today announced that Microsoft will acquire Nokia's Devices and Services unit, allowing Microsoft to unite its Windows Phone software efforts with its primary hardware partner in Nokia. The deal also includes a licensing agreement to provide Microsoft with access to Nokia's mapping services and patents.

Building on the partnership with Nokia announced in February 2011 and the increasing success of Nokia’s Lumia smartphones, Microsoft aims to accelerate the growth of its share and profit in mobile devices through faster innovation, increased synergies, and unified branding and marketing. For Nokia, this transaction is expected to be significantly accretive to earnings, strengthen its financial position, and provide a solid basis for future investment in its continuing businesses.

“It’s a bold step into the future – a win-win for employees, shareholders and consumers of both companies. Bringing these great teams together will accelerate Microsoft’s share and profits in phones, and strengthen the overall opportunities for both Microsoft and our partners across our entire family of devices and services,” said Steve Ballmer, Microsoft chief executive officer. “In addition to their innovation and strength in phones at all price points, Nokia brings proven capability and talent in critical areas such as hardware design and engineering, supply chain and manufacturing management, and hardware sales, marketing and distribution.”

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The deal will see 32,000 Nokia employees transfer to Microsoft, with Microsoft also acquiring the Lumia and Asha brands while licensing the Nokia brand for continuity with current Nokia-branded hardware. Microsoft will also acquire Nokia's long-term license with Qualcomm for chip technology.

Microsoft and Nokia have seen some success with Lumia phones running Windows Phone, but the platform remains well short of becoming a third major player in the smartphone market alongside Google's Android and Apple's iOS. By uniting the hardware and software, Microsoft seems intent upon offering a more complete and end-to-end user experience, similar in some ways to Apple's work integration of iOS and iPhone.

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Top Rated Comments

Agent OrangeZ Avatar
141 months ago
Glad I came to MacRumors today for this vital piece of Apple news!
Score: 52 Votes (Like | Disagree)
Mad Mac Maniac Avatar
141 months ago
And excuse my ignorance but... Nokia has something besides a devices and services division? Without their Nokia phone business what is Nokia left with?
Score: 35 Votes (Like | Disagree)
haruhiko Avatar
141 months ago
That's why Elop has been regarded as a Trojan horse since his installment from Microsoft to Nokia. And now he accomplished a lot: to tank Nokia's smartphone business to oblivion and let Microsoft purchase it with a fraction of its value in the past - and return to Microsoft! RIP Nokia, the once global almighty mobile phone giant. I don't know how to describe my feelings.
Score: 31 Votes (Like | Disagree)
cclloyd Avatar
141 months ago
Now when their crap crashes, it's 100% Microsoft's fault!
Score: 27 Votes (Like | Disagree)
smoledman Avatar
141 months ago
This is HUGE news. I always wanted Microsoft to buy the relevant smartphone pieces of Nokia and it's happened for a reasonable price($7.17 billion). Now MSFT is a fully vertically integrated smartphone maker along with Apple/Google.
Score: 24 Votes (Like | Disagree)
smoledman Avatar
141 months ago
Now when their crap crashes, it's 100% Microsoft's fault!

What crashing? My experience with Windows Phone 7.0/7.5/8.0 has been one of utter stability. Maybe 2 crashes in 18 months.
Score: 22 Votes (Like | Disagree)