Microsoft Corporation (NASDAQ:MSFT) to benefit from Nokia

Posted by Lynn Eisler September 13, 2013 0 Comment 1593 views

Microsoft Corporation (NASDAQ:MSFT) has acquired Nokia Corporation (NYSE:NOK)’s

Smartphone business for an amount of $7.2B. The objective obviously is to help devices that run on Windows Phone 8 to gain an upper hand in the standoff with iOS and Android.

The surface fiasco

Microsoft Corporation (NASDAQ:MSFT) wrote off $900M on the Surface RT tablets and is now hoping that its luck will change with the phones that run on the Windows 8 system. The company has been a late starter in the smartphone race and its devices have lagged behind in comparison to Samsung’s Androids and Apple’s IPhones. Currently, Windows has only approximately a 5% share in of the global smartphone market.

Nokia’s Lumia devices account for more than 50% of those sales. Even as Nokia Corporation (NYSE:NOK) launches the company’s flagship 1020 smartphone in Australia, the company has now accepted the acquisition offer from Microsoft Corporation (NASDAQ:MSFT). Via this deal, Nokia’s entire mobile phone division will be taken over by Microsoft.

Rough seas

Nokia too has not had smooth sailing in the smartphone race though it was a once a dominant in the mobile space. Microsoft had struck a strategic partnership two years ago with the Finnish phone maker. Via this deal, Nokia abandoned its in-house Symbian software for the Windows platform. In lieu of that, its mapping-expertise was used on the Windows mobile platform.

Who will head the company?

Though, it did was not officially in control, for the last two years, Microsoft Corporation (NASDAQ:MSFT) called most of the shots when it came to the Nokia relationship. As a matter of fact, the former also laid out all the details for Nokia launch events. Microsoft will now be forging that bond with a $7.2B price tag.

It will be acquiring the Finish manufacturers’ services and hardware divisions as well as the 32,000 employees. Stephen Elop, the Chief Executive will also be joining Microsoft. The market expects that he will replace Steve Ballmer, the outgoing Microsoft chief executive.

About Lynn Eisler

Lynn Eisler is a national news reporter focusing on economic issues, data analysis and the financial health of state and local governments. Lynn has been honored with the H.L. Mencken Award for Investigative Reporting, the Champion of Justice Award for reporting on the drug war, and the John Hancock Award for business reporting. Lynn was also a Knight Medical School Fellow at the University of Michigan.

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