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Microsoft acquires Nokia’s Devices and services business for EUR 5.44 billion licenses Mapping and patents

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Holly molly who saw this one coming ? Microsoft has just announced the acquisition of Nokia‘s Devices & Services business alongside licensing it’s mapping an patents portfolio for €5.4Billion in cash today. Many like me have guessed that this may have been the big plan all along since the day Stephen Elop was appointed CEO of the troubled phone maker exactly 3 years ago in one week. After the successful launch of several Nokia Windows Phone devices in the past couple of months and the continued growth of Windows Phone’s market share todays seems to be the right time for Microsoft to start a new chapter by acquiring the best Phone maker in the world and securing the biggest patent portfolio in smart device patents.

Here’s are the principal terms of today’s acquisition deal:

  • Microsoft is spending about EUR 3.79 billion to acquire Nokia’s core cellphone business. Of that EUR 1.65 billion is for Nokia’s devices business
  • Microsoft will pay $2.18 billion to license Nokia’s intellectual property
  • Nokia’s patent portfolio includes some 8,500 design patents ranging from mapping to network/cell technologies with approximately 30,000 utility patents and patent applications, ownership of the Lumia & Asha brands and a ten year license to you the Nokia brand on feature phones. (this means that Microsoft’s Windows Phones will only be branded Lumia and not Nokia..strange I know..)
  • About 32,000 Nokia employees are expected to transfer to Microsoft as part of the deal. Off those 18,300 are “directly involved in manufacturing”
  • 56,000 Nokia employees will remain at the company once the deal has closed
  • Microsoft acquires rights equivalent to ownership for the HERE Mapping apps
  • Nokia will continue to improve these apps for other platforms
  • 4 year- agreement for mapping data and services: Nokia will provide MS with mapping data and services in exchange of annual payments Microsoft will combine Nokia map data with other sources and also make it available to Windows AZURE users with an additional fee.?
  • Microsoft’s gross margin on sales of Nokia’s Windows Phone handsets before the deal: less than $10. Expected to grow to $40 after the deal.
  • Microsoft will build a $250M data center in Finland for consumer purposes (AZURE too?)
  • Finland will become a core base of Microsoft in Europe and also the center of it’s mobile hardware R&D and manufacturing.
  • Stephen Elop will step down and CEO of Nokia and head back to Microsoft as the EVP of Devices a job title that was just recently awarded to Julie Larsson Green which will now basically only handle the upcoming fall hardware launches (XBOX One, Surfaces) and report directly to Elop and Ballmer.
  • Stephen Elop just went from being and external to an internal candidate for the CEO job that Steve Ballmer will leave in the next 12 Months.
  • Nokia’s top designer Marko Ahtisaari will leave the company in November to “pursue entrepreneurial opportunities,”
  • Continue reading: Microsoft acquires Nokia’s Devices and services business for EUR 5.44 billion licenses Mapping and patents


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