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Microsoft Buys Nokia's Entire Devices and Services Division for $7.17 Billion

September 3, 2013  |  12:15pm
Microsoft Buys Nokia's Entire Devices and Services Division for $7.17 Billion

That’s not a typo. $7.17 billion. Though most people’s last associations with the Nokia brand came by way of between-class snake sessions or picking out a colorful cover plate, Microsoft has purchased the company’s entire devices and services division for the whopping sum, which they will use their cash holdings overseas to finance. The deal, which was announced late Monday night, comes two years after Nokia agreed to make Microsoft’s Windows Phones its primary focus. So now instead of having Nokia make their gear for them, Microsoft will be making it themselves, a move that reinforces their commitment to the hardware game and which they hope will lead to a more integrated user experience.

“With the commitment and resources of Microsoft to take Nokia’s devices and services forward, we can now realize the full potential of the Windows ecosystem, providing the most compelling experiences for people at home, at work and everywhere in between,” read a joint letter released by Microsoft CEO Steve Ballmer and now-former Nokia CEO Stephen Elop, who will take over as executive VP of devices and services, possibly priming him to replace Ballmer as CEO when he steps down next year.

Included in the deal, which will go into effect early in 2014, will be the licensing rights to Nokia’s patent portfolio, including their HERE maps platform, as well as Nokia’s entire mobile phone business, ranging from the Lumia to some of their lower end models popular in Asia. Microsoft will also absorb 32,000 Nokia employees.

“Bringing these great teams together will accelerate Microsoft’s share and profits in phones, and strengthen the overall opportunities for both Microsoft and our partners across our entire family of devices and services,” Ballmer said in a statement.

Despite Ballmer’s optimism, the deal has already been met with criticism, with many saying the massive purchase was unnecessary considering how unlikely it is that it will lead to Microsoft or the Windows Phone significantly loosening Apple and Google’s stranglehold on the market share.

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