Microsoft Buys Finland! (Sort of)…Software Giant Pays $7.2 Billion for Nokia’s Cell Phone Business. 10 Years Ago, Nokia’s 1100 Cell Phone Was the Best-Selling Consumer Electronics Device in the World. But That Was 10 Years Ago

Sep 3, 2013  •  Post A Comment

"Microsoft said it has reached an agreement to acquire the handset and services business of Nokia for about $7.2 billion, in an audacious effort to transform Microsoft’s business for a mobile era that has largely passed it by," writes Nick Wingfield in The New York Times.

The story continues, "Late Monday night, Sept. 2, 2013, Microsoft and Nokia said 32,000 Nokia employees will join Microsoft as a result of the all-cash deal, which will turn the Finnish mobile phone pioneer into the engine for Microsoft’s mobile efforts."

That article adds, "’This agreement is really a bold step into the future for Microsoft,” [Microsoft CEO Steve] Ballmer said in a telephone interview from Finland. ‘We’re excited about the talent capabilities it will bring to Microsoft.’ 

"Nokia was once the mightiest company in the mobile phone business, but it has lost much of its luster as the industry shifted to the era of the smartphone. Samsung and Apple divide nearly all of the profits in the global smartphone business now."

Indeed, according to Reuters, "The basic Nokia 1100, launched in 2003, was a runaway hit, shifting 250 million units, making it not just the world’s best-selling mobile, but the most popular consumer electronics device of any kind.

"Nokia remained the world’s largest vendor of mobile phones until knocked off the top spot by Samsung in 2012, but it lost its lead in the lucrative smartphone market a year earlier, having been on the back foot since the launch of Apple’s iPhone in 2007."

The way the purchase breaks down, according to Business Insider, "Microsoft will pay 3.70 billion Euro for Nokia’s devices business. That’s nearly $5 billion in U.S. dollars. Microsoft will also pay an additional 1.65 billion Euro ($2.2 billion U.S.) for the rights to Nokia’s patents.

Also, as part of the deal, Microsoft anounced that "it has selected Finland as the home for a new data center that will serve Microsoft consumers in Europe. The company said it would invest more than a quarter-billion dollars in capital and operation of the new data center over the next few years, with the potential for further expansion over time."

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