Late Monday night Microsoft made a $7.1 billion dollar push to become a “devices and services” company as they announced that it had purchased Nokia’s Devices and Services unit. Microsoft will be purchasing Nokia’s mobile division for $5 billion was well as another $2.1 billion for its patents.
This will add 32,000 people to the Microsoft workforce. The deal is set to close in the first quarter of 2014, pending regulatory and shareholder approval. When the deal does close Nokia will be reduced to three divisions: NSN, its network infrastructure division, HERE, its maps and location-based services division and Advanced Technologies, its licensing and development division. Microsoft says it will be planning to pay Nokia for a four year license of its HERE services.
“Bringing these great teams together will accelerate Microsoft’s share and profits in phones, and strengthen the overall opportunities for both Microsoft and our partners across our entire family of devices and services,” said Microsoft CEO Steve Ballmer. “In addition to their innovation and strength in phones at all price points, Nokia brings proven capability and talent in critical areas such as hardware design and engineering, supply chain and manufacturing management, and hardware sales, marketing and distribution.”
Nokia’s current CEO, Stephen Elop will join Microsoft as Executive VP of Devices and Services. Many other Nokia VPs will also move over to Microsoft. Having Elop within Microsoft makes him a good contender to replace Steve Ballmer when he resigns within a year.