Microsoft to acquire Nokia handset business in £4.6bn deal

Nokia stripped back to networks and patents offerings as Elop heads back to Microsoft.

Microsoft said it will buy Nokia's phone business and license its patents for 5.44 billion (4.6 bilion), making its boldest foray yet into mobile devices and bringing executive Stephen Elop back into the fold.

Nokia chief Elop, a former Microsoft executive, will return as Microsoft's board ponders a successor to current CEO Steve Ballmer, who will depart sometime in the next 12 months after initiating a reorganisation intended to transform the software company into a devices and services group in the mould of Apple.

The sale of Nokia's phone business marks the exit of a 150-year-old company that once dominated the global cellphone market and remains one of Europe's premier technology brands, even though Apple and Samsung's ascendancy all but reduced it to irrelevancy in Asia and North America in recent years.

"For a lot of us Finns, including myself, Nokia phones are part of what we grew up with. Many first reactions to the deal will be emotional," said Alexander Stubb, Finland's minister for European Affairs and Foreign Trade, on his Twitter account.

The sale price of the phone business, at about one-quarter of its sales last year, represented a "fire sale level," according to analyst Tero Kuittinen at consultancy Alekstra, although others disagreed on pricing.

"What should be paid for declining business, where market share has been constantly lost and profitability has been poor?" said Hannu Rauhala, an analyst at Pohjola Bank. "It is difficult to say if it's cheap or expensive."

Nokia - reduced to its networks business, navigation offerings and patent portfolio after the sale - is still the world's number two mobile phone maker behind Samsung, but it is not in the top five in the more lucrative and faster-growing smartphone market.

Sales of Nokia's Lumia series have helped the market share of Windows Phones in the global smartphone market climb to 3.3 per cent, according to consultancy Gartner, overtaking ailing BlackBerry for the first time this year. Still, Google's Android and Apple's iOS system make up 90 per cent of the market.

Canadian Elop, hired from Microsoft in 2010, has been cited among the frontrunners to take over from Ballmer, criticised for missing the mobile revolution, kicking off Microsoft's foray into the market with the tepid-selling Surface tablet only in 2012.

Featured Resources

How virtual desktop infrastructure enables digital transformation

Challenges and benefits of VDI

Free download

The Okta digital trust index

Exploring the human edge of trust

Free download

Optimising workload placement in your hybrid cloud

Deliver increased IT agility with the cloud

Free Download

Modernise endpoint protection and leave your legacy challenges behind

The risk of keeping your legacy endpoint security tools

Download now

Recommended

Nokia and Ligado partner on 4G, 5G enterprise private network
5G

Nokia and Ligado partner on 4G, 5G enterprise private network

5 Jan 2022
The IT Pro Products of the Year 2021: The year’s best hardware and software
Hardware

The IT Pro Products of the Year 2021: The year’s best hardware and software

31 Dec 2021
Nokia T20 review: A simple, sturdy Android tablet at an SMB-friendly price
tablets

Nokia T20 review: A simple, sturdy Android tablet at an SMB-friendly price

6 Dec 2021
Nokia announces new SaaS offerings for CSPs
software as a service (SaaS)

Nokia announces new SaaS offerings for CSPs

17 Nov 2021

Most Popular

How to move Microsoft's Windows 11 from a hard drive to an SSD
Microsoft Windows

How to move Microsoft's Windows 11 from a hard drive to an SSD

4 Jan 2022
Microsoft Exchange servers break thanks to 'Y2K22' bug
email delivery

Microsoft Exchange servers break thanks to 'Y2K22' bug

4 Jan 2022
Solving cyber security's diversity problem
Careers & training

Solving cyber security's diversity problem

5 Jan 2022