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Microsoft Pays Billions for Nokia Mobile Phones

microsoft-nokiaA bold step into the future for two of the biggest tech brands of the past: Microsoft will purchase the Nokia mobile phone business after agreeing a deal worth £4.6bn ($7.2bn, 5.4bn euros) with the former phone powerhouse.

While PC manufacturing giant Microsoft has been hit by the popularity of smart phones and tablets, Nokia has lost ground in the market against the new kings of mobile tech, Samsung and Apple. But upon news of this new deal Nokia shares enjoyed a 45% boost.

The sale won’t be finalised until 2014, when Microsoft will take over Nokia’s mobile phone business along with more than 30,000 employees. Microsoft will also receive Nokia patents and its mapping service.

It’s a marriage that these two former greats hope will usher in a new era of technological supremacy, and it’s timely publicity, as proven by the movement of Nokia shares.

In an official statement, Microsoft chief exec Steve Ballmer described the deal as "a bold step into the future - a win-win for employees, shareholders and consumers of both companies".

While the popularity of mobile computing has skyrocketed, Microsoft was late to the party.

They launched the Microsoft Surface tablet in 2012, but sales have been fairly slow. Then there’s the Windows Phone, for which they provided the operating system but Nokia provided the actual phone. The new deal will see Microsoft take ownership of that hardware.

Nokia was once the biggest name in the mobile phone industry but the brand is in decline. Sales fell by 27% last quarter in comparison with the previous year, although sales of the Lumia phone were up over the period.

Microsoft hope Nokia’s hardware and manpower will help them to finally compete in the mobile sphere, while a ten-year licensing deal means that all current mobile phone products will retain the Nokia name for at least a decade.

Will the deal see these two former champions achieve glory in the mobile sphere? Will the gamble pay off? Or is this the last hurrah for both? Let us know in the comments.


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