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Microsoft Buys Nokia's Mobile Phone Business

Aulia Masna - 3 September 2013

The biggest news that everyone in the mobile industry has been waiting forsince February 2011has finally arrived. Microsoft this morning announced that the company will be acquiring Nokia's devices and services division, essentially Nokia's mobile phone business, for almost $7.2 billion. Microsoft will license the Nokia brand for use with existing mobile phones for ten years and it will also acquire both the Lumia and Asha brands.

Nokia has also announced that Stephen Elop has stood down his position as CEO of the company, demoting himself to become the executive vice president of the devices and services division, precisely the division that is being shipped off to Microsoft once the deal is complete. Risto Siilasmaa, chairman of Nokia, has now assumed duties as the company's interim CEO.

The announcement of the deal effectively ends Nokia's adventure in the mobile devices industry. It previously brought Nokia Siemens Network in-house and renaming it NSN, after buying out the remaining shares of the company from former partner Siemens. With NSN and HERE, Nokia's future will now lie on the infrastructure and mapping services, although the company may yet to finalize the foundations upon which it builds its next chapter.

Changing industries has never been a stranger to Nokia as the company, which began as a paper mill in the mid 1800s before becoming an electricity company prior to its transition to the rubber industry and eventually consumer electronics and telecommunications. For a time, Nokia used to make tires and even rubber boots, and throughout the 1980s and 1990s it made televisions and computer monitors alongside mobile devices.

Microsoft will be welcoming Stephen Elop along with other Nokia executives in charge of the devices and services business Jo Harlow, Juha Putkiranta, Timo Toikkanen, and Chris Weber, not to mention around 32,000 other soon-to-be-former Nokia employees. BusinessWeek reports that the division brought in roughly half of Nokia's total sales revenue for 2012. The deal is expected to close by the end of March 2014 following various shareholder, government and agency approvals around the world.

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