Microsoft has announced that it is gearing up to purchase Nokia’s hardware division, in a deal worth £4.56 billion.
A move that has been more or less on the cards since Nokia gambled their smartphone business on Microsoft’s Windows Phone platform two and a half years ago, the deal will see 32,000 Nokia employees join the Redmond company. Nokia will also license its patents and mapping services to Microsoft, with the buyout expected to be completed in early 2014.
An open letter from Microsoft CEO Steve Ballmer and Nokia CEO Stephen Elop broke the news, while an internal email circulated among Microsoft employees, along with a Strategic Rationale document, explained the specifics of the deal to the workforce.
With Microsoft specifically buying Nokia’s Devices and Services division, Nokia CEO Elop will step down from his current position and head a new Devices team at Microsoft, while Julie Larson-Green, currently handling the Xbox One and Surface teams at Microsoft’s Devices and Studios, will join Elop.
The deal cements Microsoft’s renewed focus on hardware, giving them a mobile devices team to rival Apple’s, while still allowing them to license out the Windows Phone platform to partners like HTC and Samsung. Both Microsoft and Nokia have struggled to gain significant market share in the smartphone era; this deal will unify Microsoft’s solid Windows Phone OS with Nokia’s impressive hardware output, allowing the two to make timely and aggressive mobile moves.
One particularly interesting nugget to come along with the deal is the rumour that Elop may be now front-runner to take over from Ballmer as Microsoft’s next CEO, following Ballmers announcement that he’d be stepping down within a year. Elop, with his hardware experience lining up nicely with Microsoft’s current strategy, could be the man to helm the Redmond ship.