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03/09/2013

Microsoft to buy Nokia's devices and services business

microsoft_nokiaMicrosoft have announced their intention to acquire Nokia’s devices and services arms while also licensing their patents and mapping services. The deal will see Microsoft pay Nokia just around £3.2 billion for the business with an additional £1.4 billion for patent licensing. Microsoft will be able to use Nokia branding on the handsets they develop and Nokia themselves will focus on mapping, infrastructure and advanced tech. Approximately 32,000 Nokia employees will make the move to Microsoft and in addition to their Windows Phone devices Microsoft are also take ownership of Nokia’s Asha range of feature phones.

It seems like so long ago but Nokia was once the first name that popped into many heads when the words mobile and phone were mentioned. Iconic devices such as the Nokia 3310 were incredibly popular and at both the more expensive and cheaper ends of the market Nokia offered some of the best phones and sold a huge number of handsets. Every time phones moved in a new direction Nokia seemed to come up with the goods and adapted to producing camera phones, music focused devices and colour screens without a problem. Things took a turn for the worse when demand for touchscreen devices picked up, Apple completely changed expectations of how good a touchscreen phone needed to be and Nokia struggled to compete. Not since the Nokia N95 has a flagship Nokia device been one of the most desired phones on the market and although Nokia have still sold plenty of phones, especially in the mid and low-end of the market, they’ve been slipping further behind rivals such as Samsung.

Nokia decided to back Windows Phone rather than Android, but only after sticking with Symbian for far longer than they should have done. Their Windows Phone devices have been great pieces of hardware and have been well received but they have not sold  anywhere near the kind of numbers Nokia had hoped for. Many believe backing Android would have been a better decision and the success of rivals such as Samsung and HTC appear to give credibility to that view. Microsoft have stated they still want other manufacturers to support Windows Phone although an Apple-style link between operating system and device design may provide a better opportunity of improving the fortunes of Windows Phone. The deal is on track to be completely in early 2014 and makes it clear that Microsoft won’t be giving up on Windows Phone any time soon despite being unable to gain significant marketshare.

Lee

Lee

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