Microsoft takes control of Nokia's phone business; acquires 25,000 new employees

Microsoft takes control of Nokia's phone business; acquires 25,000 new employees

Summary: Yesterday, Nokia's devices and services business; today, Microsoft Mobile Oy. Microsoft now owns three phone platforms, a tablet and 25,000 new employees.

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It's official as of today, April 25: Nokia's Devices and Services business is now owned by Microsoft.

microsoftmobileoy

Microsoft Mobile Oy is now the subsidiary of Microsoft responsible for Lumia, Asha and Android-based Nokia X phones, and other unspecified devices. The new name and status is the culmination of Microsoft's acquisition of Nokia's handset business, which cost Redmond $5 billion (plus another $2 billion for a 10-year associated patent-licensing agreement).

Microsoft Mobile Oy is now part of the Microsoft Devices Group headed by Executive Vice President Stephen Elop. The Mobile Devices Group is now responsible for Lumia smartphones and tablets, Nokia mobile phones, Xbox hardware, Surface, Perceptive Pixel (PPI) products, and accessories.

Under the patent piece of the deal, Microsoft acquired 8,500 design patents covering phone manufacturing from Nokia. Microsoft is also licensing another 30,000 "utility" patents from Nokia for ten years, with the option to renew in perpetuity.

Microsoft isn't making any further branding announcements at this point, so this doesn't necessarily mean that any future phones or tablets will be branded "Microsoft Mobile." Microsoft licensed the rights to the Nokia brand for existing phones when it announced plans for the acquisition last fall; it also bought outright the Asha and Lumia brands.

As a result of the Nokia acquisition, Microsoft also is acquiring approximately 25,000 new employees located in 50 countries, plus several factories that design and manufacture devices. Back in September, Microsoft was expecting to acquire 32,000 employees.) The two factories that are not part of the acquisition are one in South Korea (which Microsoft acknowledged earlier this week), plus one in Chennai, India. (Nokia is involved in a tax dispute with the Indian government over the Chennai plant, and will continue operating that 7,500-employee operation on behalf of Microsoft for the time being.)

As of today, April 25, 2014, Microsoft is the company that will be handling all existing Nokia customer warranties for existing devices.

Elop will be holding a worldwide "Ask Me Anything" on the Conversations blog on April 28 at 1 pm GMT/9 am ET. The session will be recorded for later viewing.

Nokia -- the non-handset company -- is continuing to operate. It is now a three-piece operation , with a networking unit, mapping business and a patent and research arm.

Topics: Mobility, Android, Microsoft, Mobile OS, Nokia, Windows Phone

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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25 comments
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  • No more 'NOKIA' on Lumias

    Hopefully Microsoft doesn't mess up the transition in branding on their handsets. Looking at the back of my Luma 925 now, I'd prefer to see LUMIA in place of NOKIA, instead of Microsoft. It also leaves room for a nice SURFACE line too!

    I definitely look forward to more instant updates like the release of 8.1 direct from Microsoft, circumventing carriers delays. After seeing T-Mobile abandon the Lumia 810, I was more than happy to sign up as a developer and update immediately, not knowing what T-Mobile would do (or not do).
    Sundog1
    • I agree

      Nokia is a brand that everyone recognizes in Europe. In the last decade, people were buying Nokia phones without even considering Windows Mobile phones. If Microsoft does a total rebranding of the product and takes out Nokia name, customer go with another brand,....like Android.
      VictorWho
      • Can they use Nokia on phones now?

        I'm not sure if they can still use Nokia on phones now that the acquisition has been completed. Anyone else know more about that?
        Sundog1
        • Yes

          For Europe and emerging countries they should use it, for the US not so sure.
          AleMartin
        • They can continue to use Nokia on existing phones

          Everything new gets branded with a Microsoft brand (Microsoft, Surface, Lumia, Asha, Office, whatever).

          It's a bit like when Lenovo bought IBM's PC business. The IBM brand disappeared after a year or two, but ThinkPad lived on.

          (That's my recollection from what was said back when all this was announced).
          Flydog57
        • No

          They just can use the Nokia name for the Asha product line and just for the next 2 years.

          Of course, they are not going to scratch the Nokia name on existing phones. And considering how fast products need to get released these days, MS will very soon have to make a branding decision.

          Now, as far as I'm concerned, I would go for Lumia before attempting using Microsoft Lumia, at least over here in Europe (Too bad they may not go for "Microsoft Nokia" at least at first).
          deMaelstrom
          • Yes

            Microsoft has acquires rights to the Asha and Lumia brands as part of the deal. Nokia will be subject to a non-compete clause, preventing it from producing any mobile devices under the Nokia name through 31 December 2015.
            nicklab
      • I seriously doubt that

        So they'll go with an HTC running Android because they don't know that WP8 is the OS running on Nokia?

        That doesn't make any sense.
        William.Farrel
    • Um, branding

      isn't really their strong suit : -)
      dbnick
  • Microsoft takes control of Nokia's phone business; acquires 25,000 new empl

    Congrats to Microsoft, this purchase will serve them well. I'm really interested to see what kind of design changes Microsoft will make or if they will keep that Nokia unit independent for a while. What I would really like to see is some of the handsets making their way into the Microsoft Research to see what ideas they have for improving devices. A 41mp camera is hard to beat but Microsoft has come up with some great concepts through Research.
    Loverock.Davidson
    • Yep. Nice concepts...

      They just screw it up trying to make a product.
      jessepollard
      • They must have learned from you, Jesse

        you know, how to screw things up.
        William.Farrel
  • A moment of silence please

    For those poor Nokia employees
    dfolk2
    • Really?

      What makes you think Nokia treated them better than Microsoft will? Whatever you think about Microsoft, I doubt many companies treat their employees better.
      dbnick
  • Perceptive Pixel

    Perceptive Pixel under Microsoft Mobile seems like an odd choice. Aren't those displays among the least mobile of all tech devices?
    dbnick
    • It's the hardware group, not just the "mobile" group

      It's definitely hardware.
      Flydog57
  • Sad day for Windows Phone fans

    Being a European, we appreciated the Nokia brand and also bought into MS Windows Phone ecosystem. The mainstream US consumers do not understand how important Nokia branding is.

    So I am afraid that we will now see the decline in what was looking like growing interest in MS Windows Platform, as Microsoft is nowhere nearly a good enough brand for European and emerging markets.

    Rather a sad day if you are at all keen to see Windows Phone market share grow.
    JulesVerny
  • Nokia's name in jeopardy

    First off I'm an American that love, & owned Nokia phones since early 90's. It will really suck if Microsoft gets rid of that Nokia name. I hope they find a way to incorporate that name on there future phones. Nokia Lumia gave Microsoft life in this smartphone race. You can't kill it like this.
    Dead Cel
  • What is "Oy"?

    What is that "Oy" thing in the name? Sounds like misplaced letters...
    lepoete73
    • This

      http://en.wikipedia.org/wiki/Osakeyhti%C3%B6
      dbnick