Microsoft-Nokia deal: 11 quick facts

Microsoft-Nokia deal: 11 quick facts

Summary: Microsoft's bid to buy Nokia came late on Monday. Despite rumors to that effect over the past year since Nokia's financial troubles began, few expected the deal to go ahead quite like this. We explore what's going down, with whom, and when.

(Image: CNET)

Microsoft and Nokia: Together at last.

The two companies announced late on Monday that Microsoft will acquire Nokia's phone-making unit for about $7.2 billion in total — including patents — allowing the (now) former Finnish phone maker to expand its presence and technologies in other markets.

The rationale behind the deal is to secure the Windows Phone ecosystem, as well as accelerating Microsoft's phone market share. In a presentation published on Monday (PDF), Microsoft said it wants to bring "one brand" through a "united voice."

Nokia will retain its other technology units, including Nokia Solutions and Networks (formerly Nokia-Siemens Networks), Nokia Here, its CTO office, and its patent portfolio.

With so many moving parts, we've picked out the key facts of the complicated, lengthy, and likely to be scrutinized deal, which is expected to close in the first quarter of 2014.

  • The deal is split between the phone-making unit and Nokia's patents. Microsoft will spend $5 billion (€3.79bn) on the phone-making unit, and $2.17 billion (€1.65bn) on licensing Nokia's patents.

  • 32,000 Nokia employees will transfer to Microsoft, including 4,700 people in Finland.

  • Nokia sold 7.4 million Lumia smartphones in the second quarter of 2013.

  • Nokia chief executive Stephen Elop, who previously served as an executive at Microsoft, will once again join the software giant, heading up the phone-making division that Microsoft just bought.

  • Microsoft's Julie Larson-Green, currently in charge of the company's own devices and studios team, will continue to work on the Xbox One and Surface devices, but will join Elop's team once the deal closes.

  • All Microsoft and Nokia global marketing will fall under current executives Tami Reller and Mark Penn.

  • During that same quarter, Nokia sold 53.7 million units of its feature phone range.

  • Nokia will retain its patent portfolio, but will give Microsoft a 10-year license to its patents at the time of the deal closing.

  • Microsoft will make available to Nokia about €1.5 billion ($1.97bn) in financing in the form of three payments of €500 million ($659m) from overseas resources.

  • Nokia shareholders are expected to vote on the deal in an extraordinary general meeting on November 19 this year.

  • Microsoft will build a datacenter in Finland that will serve Microsoft and Nokia customers in Europe. More than $750 million in capital will be spent on the new datacenter over the next few years.

Besides that, Ballmer noted in an email, "There are no significant plans to shift where work is done in the world as we integrate, so we expect the Nokia teams to stay largely in place, geographically."

Global coverage: Nokia Interim CEO: Microsoft deal makes us stronger | Even with Nokia devices, Microsoft wants to license Windows Phone to other makers | Does its Nokia buy thwart or fuel a possible Microsoft break-up? | Microsoft shows how to flush decades of Nokia goodwill away | Microsoft gets less than $10 per Windows Phone unit | Microsoft-Nokia deal: Reaction from the Twitter trenches | Elop drops Nokia CEO role to lead devices team under Microsoft deal | Microsoft to buy Nokia's devices, services unit for $7.2B

Topics: The Microsoft-Nokia Deal, Microsoft, Nokia

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  • With Elop Gone, Nokia Will Now Be Free To Embrace Android

    I wonder if the new CEO will be smart enough?

      Didn't you read this. Nokia is selling its Hardware business to Microsoft. THERE WILL BE NO NOKIA BRANDED ANDROID PHONES.

      And I am sure the details, when they come, will mention that Nokia as a company cannot make any more phones. That is probably the whole reason from them selling their phone making business - They don't want to make any more phones.
      • Re: Nokia is selling its Hardware business to Microsoft

        They could still buy BlackBerry...
        • Lulz

          Lul Wut??
        • With what money?

          I see this is a bad day for you when that is the best you have to troll with.
          • Re: With what money?

            From their successful Windows Phone busone
          • LOL

            They are loosing hundreds of millions of dollars in their hardware business that they're selling to MSFT. They are not going to jump that quickly to acquire another loosing proposition in BB with its BB10 that sold only 2.7M last quarter. I don't think they have appetite for more loses which will definitely happen if they invest their money in a dying platform like BB10. LOL!
      • On the contraire...

        Apparently, according to "the Verge", the deal only covers smartphones... Not feature phones so Nokia is free to contact any ODM (like Hon Hai or Pegatron) to make feature phones with Tizen, Android or whatever, they just can't be called "smartphones" nor carry the Lumia or Asha brand.
        • Smart Phones

          It will be in the contract, smart phones = >CPU > 200 Mhz, installable apps , Android /ios OS etc. Feature phone by definition cant be extended and is a dying market.
    • Troll Armageddon.

      Wow, you just showed everyone how smart you are. I'll draw it in crayon:
      Microsoft buying Nokia Phone business. NSN will focus on Mapping and Networks. NSN can't build a phone because Microsoft owns that name for phones unless NSN wants to call it Siemens.
      Elop will still run Nokia Phone division when it falls under Microsoft Devices.
      Stupid Troll is Stupid
      Dreyer Smit
      • Bug off Dreyer...

        .. you don't even know what a "troll" is. Because someone has an opinion different than yours, you degrade them. hmmmmm.... lets see, what words best describes you... how about a "mindless babbling juvenile".
      • For what it's worth...

        There's no Siemens in NSN anymore, "NSN" is now "Nokia Solutions and Networks" (they bought out Siemens' share).
    • Unless Nokia

      Restarts a mobile device division - which they may not be able to do depending on how the buyout contract is worded - they won't be selling ANY mobile devices.
    • Bad idea

      Ok so they become yet another of the dozens of manufacturers making Android handsets. Really? Thats a good idea? Just because they're Nokia you think people are going to say "Oh now they're doing Android lets buy their phones"? I think they'll just make apps for phones. I don't think Nokia is going to start using another OS and again using Android would be dumb. Samsung is #1 with Android, if they did dump Android for another OS then maybe.

      The thing they can do now is make all their apps for Android and ios and make money off of that. They don't need another OS right now. They should lay back and watch the cards unfold and then make a decision later. If Samsung does stop making Android phones then they can maybe swoop in and try and take their customers.
  • Disappointed

    While it was inevitable, it's sad to see Nokia disappear from the mobile phone world. I had been planning to buy a Nokia Windows Phone, and probably still will, but I can't help but think that this acquisition will hurt the overall quality of both the devices and the software.

    Nokia was doing the innovating that Microsoft wasn't, making Windows Phone a viable option.
    • Nokia employees

      are still going to design and manufacture the phones, they will just be working with the OS developers instead of with a OS company. That allows the development teams to work together. However, I would guess that the results of the collaboration will not be in a finished product until the end of next year. In that time new phones will be released that will come with the WP8 GDR 2 and GDR 3 capabilities, plus WP Blue, and the Enterprise pack. Plus there will likely be GDRs for WP blue as well. I think the WP 8 phones will have far more features and capabilities by this time next year. Not to mention a lot more applications.
    • How will it hurt quality?

      Did you miss the part where MS will be pumping almost $1B into the "new" company and they will not be gutting it nor forcing employees to move to other MS offices? It seems to me they are attempting to improve quality and control marketing.
      • Moving

        If you have never been involved in such a takeover, you really don't know how things work. It may take a few years, but look for Nokia to move operations, and lose employees.
    • Optimistic

      If Microsoft hadn't bought Nokia's phone business, it would have gone bankrupt at some point. This would have effectively killed off any hope for the future of WP8. The facts that Microsoft saved them and that Nokia will largely be kept intact, can really only be seen as good things for people who want to buy WP8 phones in the future. Microsoft has the cash to keep Nokia running until WP8 interest builds. None of the other WP8 sources have contributed significantly to sales numbers and haven't competed well on innovation, either. For WP8 to have any chance of success, Nokia had to be saved, and Microsoft was the only one who could do it.
    • WHAT?!!

      You say the quality will degrade because it's now MSFT who will own Lumia smartphones and yet you, who have not owned a Windows Phone yet, will still buy one?!! I absolutely disagree with you about the quality degradation but why on earth would you buy something at this time when you believe it will not be as good in quality as previously?!!