Nokia phones, cameras, maps, engineers, patents and licenses all to coming to Microsoft.
Late yesterday on Labor Day evening, Microsoft announced a major breakthrough in their battle to develop products reflective of cohesive software and hardware divisions as well as the possible new leadership in the wake of former CEO Steve Balmer's departure. Microsoft has agreed to purchase all of Nokia's Devices and Service's business, as well as license Nokia's patents, and mapping services for a sum of $7.2 billion dollars.
First off, there is the visible end of Nokia. While the company will continue to operate and offer products, those products will not include phones, which for a time ruled the marketplace. Some 32,000 Nokia employees will become Microsoft employees in 2014, and those remaining with Nokia may not be sure where the company is heading. The company has been trying to generate buzz by injecting better and better cameras in their Lumia smart phones, along with getting into the tablet business. All that now belongs to Microsoft.
On the Microsoft side, the move means at a minimum that Microsoft will try to develop its own signature Windows phones, but more importantly, Nokia developed technologies will proliferate Microsoft products. Microsoft's hardware has not enjoyed the same reputation for reliability as Nokia. Furthermore, Nokia's latest innovations could benefit products like the Surface and Xbox One.
Then there is Nokia's CEO Stephen Elop. As former head of Microsoft's Business Division, and engineer of the entire Nokia Windows phone initiative, Elop is the instant pick to replace former Microsoft CEO Steve Ballmer.
Under Elop's direction, Microsoft products like Xbox SmartGlass might return from the backburner. Microsoft plans to continue to license out Windows Phone operating systems, but now expects to at least make more money per phone. Formerly, Microsoft only made $10 per phone from licensing to Nokia, but now can expect $40 per for a full unit. The software giant's history of licensing out its software may be at odds with the new goals of unified products, and the new CEO will need to set the agenda in order to navigate both directions.
Author: Brian Hoss