Microsoft and Nokia reunite for new alliance, 5 years after failed $7B smartphone megadeal (2024)
It’s been more than five years since Microsoft’s $7 billion ill-fated acquisition of Nokia’s smartphone business, and now the companies are teaming up once again.
The new partnership combines Microsoft’s expertise in cloud computing and artificial intelligence with Nokia’s 5G private wireless and mission-critical networking prowess. Together, the companies envision helping communications providers offer new services and building Internet of Things products for industries such as smart cities, logistics, healthcare, and transportation.
“Bringing together Microsoft’s expertise in intelligent cloud solutions and Nokia’s strength in building business and mission-critical networks will unlock new connectivity and automation scenarios,” Microsoft Azure Executive Vice President Jason Zander said in a statement. “We’re excited about the opportunities this will create for our joint customers across industries.”
Microsoft in 2014 completed the acquisition of Nokia’s smartphone business, a move the company hoped would provide a jolt to the Windows Phone division. The move proved to be an early challenge for CEO Satya Nadella, who dealt with the fallout of the acquisition that was first announced during Steve Ballmer’s tenure leading the company. Microsoft later retreated from the deal, shedding the smartphone business, shedding thousands of jobs and taking a $7.6 billion charge.
Nokia’s primary focus now is on network equipment, software and services for communications providers and other enterprises. It has done extensive work to plan for 5G in recent years, and in 2018 it formed a $3.5 billion partnership with T-Mobile to speed up deployment of the next generation of wireless tech.
HELSINKI/SEATTLE (Reuters) - Microsoft Corp will buy Nokia's phone business and license its patents for 5.44 billion euros ($7.2 billion), a bold foray into mobile devices that also brings potential chief executive contender Stephen Elop back into the fold.
The analysts turned out to be correct. Microsoft struggled to consolidate its development platform over two consecutive OS releases on the desktop and its mobile OS, and was unable to attract the developer and carrier partnerships needed to make the new Lumia phones successful.
Cut to - the end of 2013, Microsoft announces the acquisition of all Nokia phone operations for more than 5B euros. It was Microsoft's move to take part in the mobile market after having underestimated it and focused mainly only on its PC business. It was an ambitious bet and a bigger challenge for Microsoft.
Yes, it was a big loss. Microsoft purchased Nokia smart phone business and Nokia's patents for around $7.2 Billion on September 2, 2013. Why? Microsoft was doing its businesses as usual and suddenly they realized that they had missed a bus that they need to board.
Mobile Market Competition: Microsoft faced intense competition from companies like Apple and Google in the mobile device and operating system market. By acquiring Nokia's mobile phone business, Microsoft aimed to bolster its position and increase the market share of its Windows Phone operating system.
On 18 May 2016, Microsoft Mobile sold its Nokia-branded feature phone business to HMD Global, a new company founded by former Nokia executive Jean-Francois Baril, and an associated factory in Vietnam to Foxconn's FIH Mobile subsidiary.
HMD Global, the manufacturer of Nokia smartphones, acquired the Nokia brand from Microsoft in 2014. Now, HMD Global is retiring the 'Nokia' brand and introducing new smartphones under its own 'HMD' brand.
For years Nokia was the undisputed leader in the mobile phone category as it singlehandedly defined the cutting edge in mobile technology. An Era has ended as Microsoft purchased Nokia for $7.17 billion.
Essentially, the financial cost disclosed on Wednesday — and the accompanying round of 7,800 layoffs — means the handset business is almost worthless and that Microsoft overpaid for the intellectual property. Mr. Ballmer agreed to the deal as he was stepping down as chief.
Nokia failed to adapt to changing consumer expectations and reposition itself in the market. After Apple introduced its game-changing smartphone, a large group of consumers saw what the future of the industry could provide. They understood the long-term benefits of developing mobile technology better than Nokia did.
Nokia expects full year 2024 comparable operating profit of between EUR 2.3 billion to 2.9 billion and free cash flow conversion from comparable operating profit of between 30% and 60%.
However, after several years of declining sales and profitability, Microsoft eventually sold the Nokia smartphone business to a Finnish company, HMD Global, in 2016. Since then, HMD Global has relaunched the Nokia brand and has been producing and selling Nokia-branded smartphones.
Microsoft announced today it was going to shut down the Nokia phone unit, take a $7.6 billion write-off (more than the $7.2 billion they paid for it) and lay off another 7,800 employees. That makes the layoffs since CEO Satya Nadella took the reins almost 26,000.
On January 18, 2022, Microsoft announced its intent to acquire Activision Blizzard for $68.7 billion. The deal was concluded on October 13, 2023, with the total cost of the acquisition amounting to $75.4 billion.
Introduction: My name is Van Hayes, I am a thankful, friendly, smiling, calm, powerful, fine, enthusiastic person who loves writing and wants to share my knowledge and understanding with you.
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