Microsoft and Nokia: Phone home

LEAVING Microsoft quietly was never on the cards for Steve Ballmer (pictured, right). Only a week after the surprise announcement that he would retire within a year from the post of chief executive he has held since January 2000, Mr Ballmer announced that the software giant will acquire Nokia’s handset business in a deal valued at $7.2 billion. Not only does this deal mean a doubling down on Microsoft’s mobile strategy, it also means the return of the man who has suddenly become hot favourite to succeed Mr Ballmer: Stephen Elop, the chief executive of Nokia (pictured, left).Nokia was already the largest producer of smartphones running Microsoft’s Windows Phone software, under a joint venture that started in 2011. (Nokia was not the only maker of these phones, however, and Microsoft intends to continue to license the software to other manufacturers.) Mr Ballmer believes that integrating Nokia’s handset business into Microsoft will bring valuable synergies and faster growth in a market in which it currently lags behind Google’s Android and Apple’s iOS operating systems, though is now ahead of BlackBerry. Microsoft will also acquire Nokia’s Asha feature-phone range and ten years’ access to the Finnish conglomerate’s patent library.Some 32,000 Nokia staff will join Microsoft, including Mr Elop, who on the announcement of the deal stepped down as Nokia’s chief executive. …

Link to article: www.economist.com/blogs/schumpeter/2013/09/microsoft-and-nokia?fsrc=rss

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