Tuesday, September 3, 2013

Microsoft acquires Nokia for 5.44 billion Euro (7.18 billion USD)

Microsoft has acquired the mobile phone department of Nokia for a total value of 5.44 billion Euro or 7.18 billion USD, which is believed to be necessary to allow the mobile phone departments to survive in the long run.

Best money acquisition microsoft
Nokia and Microsoft are two giants on the technology market. However, in the last decade or so, both corporations have encountered significant issues to succeed in the mobile phone segment. Microsoft has for several year attempted to penetrate the market with their Windows Phone operating system and Nokia has had difficulties facing the challenges posed by the widely popular iOS and Android devices.

In 2010, Nokia decided to focus purely on Microsoft Windows Phone on their smartphones (no other manufacturers have done this), and has since launched multiple smartphones. However, the reception has not been overwhelming and still today, the Windows Phone system is considered to be nothing but a failure from both Microsoft's and Nokia's perspectives.

With the acquisition of Nokia, Microsoft obviously hopes to increase its rate of innovation as it means that Microsoft will have control over both the software and the hardware. Hopefully, this will prove to be the correct strategy and allow Microsoft to finally properly compete against iOS and Android.

Some analysts claim that ever since Stephen Elop left Microsoft to become the CEO of Nokia, this has been a work behind the curtains. Stephen Elop is said to have prepared Nokia for a future acquisition and that the whole thing was carefully planned and not something that happened by chance. This is in particularly interesting as Stephen Elop claimed that he was unhappy with Microsoft when he left the company.

With the acquisition of Nokia's cell phone department, Nokia will now mainly focus on infrastructure related network solutions, something that is a direct competitor to the Swedish Ericsson, but also something that Nokia is apparently much stronger and established in. The acquisition involves 32000 employees of Nokia, who will all now formally work for Microsoft. 

The whole acquisition is expected to be completed in the first quarter of 2014 and it will be highly interesting to see how Microsoft will utilize its newly gained knowledge and capabilities to strengthen itself on the smartphone market.

No comments:

Post a Comment