Microsoft has decided that it will buy Nokia handsets of worth $7.2 Billion (5.44 billion Euros). Microsoft in addition will licence the patent and this way two smartphone businesses can be revived against Apple and Google.
Apple and Google have been dominating the smartphone market globally for almost half a decade and Nokia who has ruled the mobile phones market for a very long time is now struggling against them and it is hard for them to survive.
Nokia will transfer the device units and 32,000 employees to Microsoft and Nokia Chief Executive Officer Stephen Elop will also work in Microsoft along with the other employees.
Nokia shares have jumped in the market as a 48% increase in the shares have been observed in Helsinki due to this sale.
For Microsoft it also is one of the largest hardware purchases. Earlier Microsoft was the largest software maker but due to dwindling demand of Microsoft Windows operating system, its position as largest software maker was in danger.
Critics are saying that Microsoft and Nokia both have not been successful in smartphone market and it is quite difficult to make your way to the top by combining two weak companies.
As far as the smartphone market is concerned, this deal is considered the largest deal after Google’s acquisition of Motorola back in 2012.
For Microsoft this deal is second-largest deal as far as the patent licence payment is concerned as Microsoft paid $8.5 billion to the Skype back in 2011.
With this purchase all the pioneer mobile manufacturing companies are out of the individual mobile making business. Nokia, Motorola, Sony Eriksson and BlackBerry is also thinking to sell the business.
So now the real contest remains between Apple, Google and Microsoft. Samsung does make handsets but it uses Google’s Android platform for the operating system and does not have its own.
Apple manufactures its handsets itself and has iOS operating system which is developed by Apple. Google has Android operating system platform and after acquisition of Motorola they make their own smartphones now. Microsoft has now joined the race and it will utilize Windows for mobile operating system to be incorporated in their Nokia handsets.