Microsoft completes Nokia acquisition

UPDATED 13:51PM: Microsoft has today (25 April) completed its purchase of Nokia’s handset business, with the latter brand also moving to scotch rumours the merged company would cease producing Nokia branded products in favour of “Microsoft Mobile” products.

Satya Nadella Stephen Elop
Microsoft CEO Satya Nadella and Stephen Elop, Nokia’s former president and CEO, who now serves as executive vice president of the Mobile Devices Group.

Under the deal, which has now been approved by both companies and regulatory authorities, Microsoft’s devices portfolio will include Lumia smartphones and tablets, Nokia feature phones, Xbox and Surface tablets.

Microsoft has also acquired Nokia’s marketing, design and sales teams and most of its manufacturing and operations facilities – approximately 25,000 staff.

The purchase will advance Microsoft’s “transformation”, according to CEO Satya Nadella. With the Nokia business it plans to target the affordable mobile devices market, “$50bn annual opportunity”.

In a statement Microsoft says: “With a deeper understanding of hardware and software working as one, the company will strengthen and grow demand for Windows devices overall.”

Stephen Elop, Nokia’s former president and CEO who now serves as executive vice president of the Mobile Devices Group, says: “As Microsoft and Nokia Devices and Services come together as an expanded family, we will unify our passion, dedication and commitment to bringing you the best of what our joint technologies have to offer.”

In an article on the Microsoft site, he continues: “[As Nokia becomes part of Microsoft] we have to not only evolve to fit into Microsoft in general, but into an evolving Microsoft.”

Nokia dismisses rumours it is to become “Microsoft Mobile”

Earlier this week it was rumoured that Nokia would be rebranded to “Microsoft Mobile” once the deal completed. Analysts have previously said dropping the Nokia brand name could be a “risky move”, given the heritage of the Finnish brand.

Microsoft’s announcement about the acquisition on its press site also mentioned the “Microsoft Mobile Oy” company name: ”Microsoft refers to Microsoft Corp. and its affiliates, including Microsoft Mobile Oy, a subsidiary of Microsoft. Microsoft Mobile Oy develops, manufactures and distributes Lumia, Asha and Nokia X mobile phones and other devices.” 

A Microsoft spokeswoman told Marketing Week any details about a potential rebrand had yet to be disclosed, but a spokesperson told technology website CNET: “Any further decisions regarding specific branding will be made further down the road as part of the future integration.”

A Nokia spokesperson referred Marketing Week to the company’s press site.

UPDATE: However, after this article was originally published, the official global Nokia account tweeted Marketing Week to say: ”We will continue with Nokia-branded products, as Microsoft has licensed the Nokia brand for some time.”

Microsoft announced last year it had agreed to a 10-year license arrangement to use the Nokia brand on current and subsequently developed mobile phones, based on the “Series 30 and Series 40 operating systems”.

A post on Nokia’s “Conversations” blog says the blog will continue on, alongside global country-specific Facebook, YouTube, LinkedIn and Twitter acccounts – “run by the same people and teams now at Microsoft” – also adding weight to the suggestion that the Nokia brand will stay.

The financial details of the deal have not yet been disclosed, but when Microsoft first announced its intentions to purchase Nokia’s handset business last year, the business was valued at €5.44bn (£4.6bn). The Finnish company says the final price is likely to be “slightly higher” than this, due to adjustments made for net working capital and cash earnings, but did not provide further details.

The two companies first formed a “strategic partnership” in 2011 that saw all Nokia smartphones run on the Windows Phone operating system. However, Nokia launched its first Android device at Mobile World Congress in Barcelona earlier this year as it looked to widen its appeal to customers in emerging markets. 

In February a report from research company IDC suggested Windows Phone “stands to grow the fastest among the leading smartphone operating systems” between 2014 and 2017.

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