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Microsoft announced yesterday that it will be acquiring Nokia's devices and services division. Microsoft will pay €3.79bn for Nokia's devices and an additional €1.65bn for the rights to Nokia's patents (which remain Nokia’s property). It’s a bold move that confirms the software company's intention to compete with Apple and Google duopoly as a "devices and services" player.
As part of the deal, a total of 32,000 Nokia staff and the CEO Stephen Elop will join Microsoft, Elop will be rejoining Microsoft after leaving the company in September 2010. Nokia will also receive €1.5bn of "immediate financing”.
Nokia was the dominant player in the feature phone market but missed the transition to smartphones. It was surpassed first by Apple and later by Samsung and companies using Google's Android OS. Today, Microsoft is acquiring a struggling company with huge financial difficulties and troubles in maintaining its business in mature markets. Nevertheless, there are signs that this move could make business sense...