Tuesday, September 3, 2013

Microsoft to buy Nokia mobile unit

Microsoft has agreed to buy the Nokia's mobile phone business for 5.4 billion euros ( $ 7.2 billion £ 4.6 billion ) . 

Nokia licenses its patents and Microsoft mapping services . Nokia shares rose by 45 % of the news of the deal.


The acquisition is set to be completed in early 2014 , when nearly 32,000 Nokia employees were transferred to Microsoft .

Although Nokia has struggled against competition from Samsung and Apple , Microsoft has been criticized for being slow in the mobile market .

Describing the agreement as a " big step forward , " Microsoft CEO Steve Ballmer told the BBC that his company is in the process of someone who " was known for software and PCs , for a company that focuses on the devices and services . "

" We have a lot of great work over the past two and a half years we have reported , to 7.4 million Windows smartphones in the last quarter in collaboration with Nokia , from literally any phone " said .

But he admitted: " We have to do to expand the application of our product more work . "

Right of way

Microsoft, one of the biggest names in the technology sector, has struggled as consumers traditional PCs and laptops have rejected in favor of smartphones and tablet PCs .

Critics say the company is too slow to respond to the growing market of mobile devices has been. They launched its Surface tablet PC last year , but sales of the devices are relatively slow.

Analysts said the company wanted to make sure you have the right strategy in the mobile phone market .

"Mobile is an area of ​​huge potential , but is one of the weaknesses of Microsoft , " Manoj Menon , director of the consulting firm Frost & Sullivan , told the BBC .

"It is clear that the number one priority of the company is to get . From the perspective of the strategy , the best mobile strategy this deal is the perfect step , the only question is how well you can execute this plan. "

Ben Wood , analyst at telecoms consultancy CCS Insight , said: " It is a necessary commitment by Microsoft to enter the cell, but given the complete dependence of Nokia Windows Phone devices and competitiveness of Apple and Google , with a rival mobile moving platforms understandable.

" It completely transforms the business of Microsoft pushing firmly in hardware , but it also raises important questions about the sustainability of other companies, including HTC and Blackberry , remaining pure - . Gives phone manufacturers , " he added .


" A better integration '

Nokia was once a leader in mobile phones , but sales of the company last year fell 24 % in the three months to end of June.
It sold 53.7 million handsets in the quarter , 27 % less than last year .

However, sales of its new Lumia phones that run Microsoft's operating system , increased during the period .

Mr Menon said the agreement between the two companies would help the " hardware closer to the operating system and achieve greater integration . "

" This should help Microsoft to provide a more effective strategy to compete in the mobile arena to make , " he said.

Microsoft has also signed a 10 - year license to use the brand Nokia Nokia in the mobile current products .

Management changes
Nokia also announced changes to the management team as a result of the sale . Stephen Elop will resign as president and CEO of Nokia Corporation and resigned from the board of directors of the company.

The company said it would go to the Executive Vice President of equipment and service units become , and added that he hoped that " the transfer to Microsoft in the early closure " of the operation .

The transfer of Mr. Elop from Microsoft comes at a time when the company is looking for a new director .

The current head of Microsoft , Steve Ballmer , announced last week that he retired and is expected to leave in the next 12 months the company.

Summing up his term as head of one of the largest technology companies in the world , told the BBC : " I 'm happy with what we have achieved , I am satisfied with the level of innovation that we have brought smart devices worldwide .

" But there is always a challenge and with this acquisition we will take it to the next level . Things "

Mr. Elop left Microsoft to close in 2010 , Nokia has been called by some as one of the leading candidates to replace Mr. Ballmer .
The Future of Nokia
The transaction is still subject to the approval of the shareholders of Nokia and regulators .

Nokia says that once the sale is completed , we will focus on three core businesses - manufacturing equipment , location mapping and network services , and the development and technology licensing .

Earlier this year , Siemens agreed to 50 % stake in their joint venture Nokia Siemens Networks ( NSN ) , which makes telecommunications networks , to buy for € 1.7 billion .

Global sales of mobile phones (second quarter 2013)

ManufacturerUnits sold (million)Market share
SOURCE: Gartner
Samsung
107.5
24.7%
Nokia
60.9
14%
Apple
31.9
7.3%
LG
17
3.9%
ZTE
15.2
3.5%
Others
202.3
46.5%

Nokia over the years

1871 : Foundation. Spend the next century making tires , boots and cables .

1987: Launches the first phone . The Cityman Mobira weighs about 1 kg .

1992 sells non-mobile divisions and launches first digital GSM phone , the Nokia 1011.

2000 : The market value reached 186bn euros . Now worth € 11 billion .

2003 launch 1100 Basic phone. Will sell 250 million units and more popular consumer electronics device in the world.

2011: Let the Symbian mobile operating system software and changes to the Windows platform in place .

2013: start in 1020 with a 41 megapixel camera Lumia .

Source: Reuters / Nokia

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