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Nokia to Sell Devices & Services Business to Microsoft for $7.2 Billion

Business, Companies, Technology
Nokia to Sell Devices & Services Business to Microsoft for $7.2 Billion

A big shift in the Nokia’s devices and services is expected to happen earlier next year.  This, after computer monster Microsoft bought Nokia’s mobile phone business, including its Lumia brand.

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In February 2011, Microsoft and Nokia sealed a partnership to compete with giant smartphone companies such as Samsung, Apple and HTC. Nokia once dominated the global market until it collapsed due to the advent of these companies.

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The deal covers Nokia’s devices and service business, with 32,000 Nokia employees to be transferred to Microsoft – 4,700 employees in Finland and 18,300 working on manufacturing, assembly and packaging of Nokia products. This will take effect in 2014.

Nokia CEO Stephen Elop will also take over Microsoft’s Expanded Devices team, including the Xbox One, as announced by Microsoft CEO Steve Ballmer himself. Ballmer is set to leave the company in a year.

Microsoft suffered a 6 percent loss, leading them to cut over $15 billion off its market value . Investors questioned its acquisition of an underperformed company with a loss of $4 billion last year after trying to reinvent Microsoft into a company like Apple but failed to win the endorsement of stakeholders.

Microsoft is set to profit $40 in every Nokia smartphone it sells. However, it needs to sell over $50 million smartphones every year to break even.

Ballmer is all positive with the merger, stating ; “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.”

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