Microsoft says it has reached an agreement to acquire the handset and services business of Nokia for about $7.2 billion, in an audacious effort to transform Microsoft’s business for a mobile era that has largely passed it by, Nick Wingfield reports.
Late Monday night, Microsoft and Nokia said 32,000 Nokia employees would join Microsoft as a result of the all-cash deal, which will turn the Finnish mobile phone pioneer into the engine for Microsoft’s mobile efforts.
Stephen A. Elop, a former Microsoft executive who was running Nokia until the deal was signed, will rejoin Microsoft after the transaction closes, setting him up as a potential successor for Steven A. Ballmer, Microsoft’s chief executive. Mr. Ballmer has said he will retire from the company within 12 months.
“This agreement is really a bold step into the future for Microsoft,†Mr. Ballmer said by phone from Finland. “We’re excited about the talent capabilities it will bring to Microsoft.â€
The fortunes of the two companies in the mobile business have become closely intertwined since they signed a pact two years ago for Nokia to use Windows software on its phones, but it has done little to turn either company into a leader in the mobile business.
Windows Phone accounted for only 3.7 percent of smartphone shipments in the second quarter, according to the technology research firm IDC. Nokia remains the second-largest shipper of mobile phones in the world after Samsung, but that is largely because of lower-end feature phones, from which consumers are moving away. Nokia is no longer among the top five makers of smartphones.
Mr. Ballmer declined to say whether Mr. Elop, considered a leading contender to be his successor because of his familiarity with Microsoft and the importance of mobile to Microsoft’s future, will be considered for the job.
Mr. Elop, a native of Canada whose family still lives in the Seattle area, says he believes the industry is at a “tipping point†where a third mobile phone ecosystem, based on Windows Phone, will emerge as a more vibrant alternative to the iPhone and devices running Google’s Android operating system.
