Microsoft Begins Life As A Smartphone Manufacturer As Nokia Deal Is Finalized


Nokia CEO Stephen Elop

Microsoft and Nokia will consummate their marriage by the end of this week. On Monday, Microsoft said its $7.2 billion acquisition of Nokia’s devices and services division, which was announced in September, will be finalized by Friday.

In the deal, Microsoft will subsume nearly 32,000 Nokia employees including CEO Stephen Elop, who will become the head of devices at Microsoft reporting to Microsoft CEO Satya Nadella. 

Reports surfaced over the weekend that Microsoft would rename Nokia as “Microsoft Mobile.” Microsoft has not confirmed the name change at this time. Under the original agreement of the acquisition, Microsoft is allowed to use the “Nokia” and “Lumia” smartphone brand names for several years after the acquisition is finalized.

Microsoft announced a couple of tweaks to the original agreement on Monday, noting that it will bring on a 21-person team in China in addition to working on new mobile devices; part of the original agreement said Microsoft would take control of a manufacturing facility in Korea, but that is no longer the case. Microsoft will, however, take control of the Nokia.com domain and its social media sites for up to one year.

See also: With Nokia, Microsoft Has No More Excuses

Nokia will continue to exist as a company outside of Microsoft. Nokia retains its patents portfolio, brand name and the Nokia HERE maps team that employs about 6,000 people globally. 

Microsoft, on the other hand, will now embark into previously uncharted territory as an original device manufacturer that designs and builds its own hardware. With Nokia in tow, the pressure is on Microsoft to grow its own market share and the general viability of its mobile platform, Windows Phone. Earlier this month, Microsoft released the developer preview of the latest version of Windows Phone, Windows Phone 8.1, which introduces a new voice-activated personal assistant called Cortana plus a handful of other new features and improvements.

Lead image (Stephen Elop at Mobile World Congress 2014) by Dan Rowinski for ReadWrite

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