Microsoft announced late Monday night that it would acquire substantial consumer-facing parts of Nokia, the Finland-based telecommunications company, and pay more than $7 billion for the privilege. The company will purchase all of Nokia's devices and services assets and license their patents and mapping services, seemingly in order to improve its perennially-third-place Windows 8 line of phones. This kind of acquisition isn't unheard of: back in the summer of 2011, Google announced plans to purchase Motorola for $12.5 billion. That acquisition is just now starting to bear fruit, in joint devices like the new Moto X.
Back in February 2011, Nokia agreed to make Windows Phone their primary mobile OS and have since been manufacturing the Lumia line. In other words, "Lumia" is to "Windows Phone" as "Nexus" is to "Android." Perhaps you've been on the receiving end of Microsoft's marketing blitz for the newest model, the Lumia 1020, which is being pitched as less of a phone and more as a camera with internet access.
Microsoft buys Nokia for $7.2 billion. Crazy stat: In 2007 Nokia's market share was 48.7%. By 2012 it had slipped to 3.5%.— Nick Bilton (@nickbilton) September 3, 2013
I wouldn't bet against a company that ships the 2nd most phones, owns Skype, owns Xbox, has tons of cash & is about to get a hungry new CEO.— Anil Dash (@anildash) September 3, 2013
Microsoft licensed the "Nokia" brand for Asha phones, not Lumias; Nokia as a smartphone brand is effectively dead. http://t.co/OTWRocnlNX— nilay patel (@reckless) September 3, 2013
This might be one of the final big moves for current Microsoft CEO Steve Ballmer, quoted in the announcement touting the deal as a "win-win." The oft-criticized Ballmer announced he would be stepping down as CEO within a year. Over at AllThingsD, Kara Swisher called Stephen Elop (pictured above with Ballmer), who was a former Microsoft exec and the CEO of Nokia until hours ago, the candidate to beat for the top job.
Actually, with the giant transaction to buy the Finnish phonemaker, Elop isn’t the head of Nokia anymore, but EVP of devices and services.
But it seems clear that the acquisition puts the former president of Microsoft’s business division in the front of the line to take over the software giant, ahead of several internal candidates and a whole lot of external ones. In fact, he is both external and internal.