Microsoft to buy Nokia Unit

Posted by Cash On on 2013-09-03 0

Microsoft has agreed a deal to buy
Nokia's mobile-phone business for
5.4bn euro ($7.2bn; £4.6bn).
Nokia will also license its patents and
mapping services to Microsoft.
The companies said in a joint news
release that the deal will be finalised
in early 2014, when about 32,000
Nokia employees will transfer to
Microsoft.
While Nokia has struggled with
competition from Samsung and
Apple, Microsoft has been criticised
for being slow into the mobile
market.
"It's a bold step into the future - a
win-win for employees, shareholders
and consumers of both companies,"
said Steve Ballmer, chief executive
officer of Microsoft.
The transaction is subject to approval
by Nokia shareholders and
regulators.
'Number one priority'
Microsoft, one of the biggest names
in technology sector, has struggled
as consumers have shunned
traditional PC and laptops in favour
of smartphones and tablet PCs.
Critics say the firm has been too
slow to respond to the booming
market for mobile devices.
It launched its Surface tablet PCs last
year but sales of the devices have
been relatively slow.
Analysts said that the company
wanted to make sure that it got its
strategy right in the mobile phone
market.
"Mobile is an area of tremendous
potential but it has been one of
weakness for Microsoft," Manoj
Menon, managing director of
consulting firm Frost & Sullivan told
the BBC.
"Clearly the number one priority for
the company is to get its mobile
strategy right. From a strategy point
of view, this deal is the prefect step,
The only question is how well they
can execute this plan."
'Tighter integration'
Nokia was one a leader in mobile
phone category but the firm's sales
fell 24% in the three months to the
end of June, from a year earlier.
It sold 53.7 million mobile phones
during the quarter, down 27% on
last year.
However, sales of its new Lumia
phones, which run a Microsoft
operating system, rose during the
period.
Mr Menon said that the deal
between the two companies will help
bring the "hardware closer to the
operating system and achieve a
tighter integration".
"This should help Microsoft make a
more affective strategy to compe