So, the not so unthinkable finally happened. I am really feeling overwhelmed by the emotions that are rising deep inside, but have to report this!!
The way we knew Nokia is going to cease to exist soon with MS and Nokia entering into an agreement where MS will buy Nokia’s Devices and services division for EUR 3.79 billion and pay EUR 1.65 billion to license Nokia’s patents, for a total transaction price of EUR 5.44 billion in cash.
Apart from this Microsoft will become a strategic licensee of the HERE platform, and will separately pay Nokia for a four-year license. It will also license Nokia brand for Mobile phones and Nokia will still be owning and managing the Nokia brand itself.
Under the terms of the agreement, Microsoft will acquire substantially all of Nokia’s Devices and Services business, including the Mobile Phones and Smart Devices business units as well as an industry-leading design team, operations including all Nokia Devices & Services-related production facilities, Devices & Services-related sales and marketing activities, and related support functions. At closing, approximately 32,000 people are expected to transfer to Microsoft, including 4,700 people in Finland and 18,300 employees directly involved in manufacturing, assembly and packaging of products worldwide. The operations that are planned to be transferred to Microsoft generated an estimated EUR 14.9 billion, or almost 50 percent of Nokia’s net sales for the full year 2012.
Microsoft is acquiring Nokia’s Smart Devices business unit, including the Lumia brand and products. Lumia handsets have won numerous awards and have grown in sales in each of the last three quarters, with sales reaching 7.4 million units in the second quarter of 2013.
As part of the transaction, Nokia is assigning to Microsoft its long-term patent licensing agreement with Qualcomm, as well as other licensing agreements.
Microsoft is also acquiring Nokia’s Mobile Phones business unit, which serves hundreds of millions of customers worldwide, and had sales of 53.7 million units in the second quarter of 2013. Microsoft will acquire the Asha brand and will license the Nokia brand for use with current Nokia mobile phone products. Nokia will continue to own and manage the Nokia brand. This element provides Microsoft with the opportunity to extend its service offerings to a far wider group around the world while allowing Nokia’s mobile phones to serve as an on-ramp to Windows Phone.
Nokia will retain its patent portfolio and will grant Microsoft a 10-year license to its patents at the time of the closing. Microsoft will grant Nokia reciprocal rights to use Microsoft patents in its HERE services. In addition, Nokia will grant Microsoft an option to extend this mutual patent agreement in perpetuity.
In addition, Microsoft will become a strategic licensee of the HERE platform, and will separately pay Nokia for a four-year license.
So, what is Nokia left with is NSN, Here Maps and a swelling patent portfolio. Though we will keep reporting the bits about Nokia phones continuously on this blog but it is really painful to see Nokia losing its most exciting part of its existence!!
This was certainly not hoped to end like this!! There is one small hope somewhere in some part of mine that may be Nokia one day again thinks of making phones!!