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Microsoft Acquisition of Nokia Devices To Close this Week
Posted April 21, 2014
Microsoft Acquisition of Nokia Devices To Close this Week
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By Seth Fitzgerald. Updated April 21, 2014 2:48PM

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Microsoft has confirmed that after a lengthy international review process, its $7.2 billion acquisition of Nokia's Devices business and the company's patents will finally close this Friday. Plans for the acquisition were first announced in September 2013, and with the exception of some Asian regulatory authorities, the deal passed through other regulators in North America and Europe without issue.

Some changes have been made to the deal since it was first made public. In 2013, both companies agreed that Nokia's Chief Technology Office employees would remain with Nokia but it now appears that 21 of them will be heading to Microsoft. Certain aspects of the agreement, such as which company will control Nokia's handset factory in India, have not been made public.

Microsoft Mobile

To avoid confusion, Microsoft is reportedly going to rename the Nokia Devices and Services business Microsoft Mobile. The name change was first made public in a leaked letter from Nokia to its suppliers.

By changing the division's name it is possible that devices like the Nokia Lumia 1020 will eventually be called the Microsoft Mobile Lumia 1020, or even the Microsoft Lumia 1020. Ross Rubin, principal analyst at Reticle Research, believes the latter is more likely.

"With the Nokia brand removed from the smartphone line, it could simply be called Microsoft Lumia," Rubin said. "This would allow Microsoft to retain some of the value around the Lumia brand that has been built up over the past few years, assuming that it didn't want to change that name for some reason."

Since Microsoft has acquired the Lumia brand and Nokia has entered into a non-compete agreement that prevents it from releasing handsets through 2015, the naming structure could also stay the same. The only issue present with not renaming Nokia's phones and tablets is that consumers could end up confused as to which company is actually making the devices.

Away from Consumers

Without its Devices and Services business, Nokia has been stripped down to its last significant subsidiary, Nokia Solutions and Networks (NSN). Only one month before the Microsoft deal was announced, Nokia acquired all of Siemens' stake in what was previously called Nokia Siemens Networks.

Although the consumer-facing sector of Nokia is the only part that most people knew about, its deal with Microsoft does not mean that Nokia is no longer a massive player in the technology industry. NSN, which employs nearly 60,000 people around the world, is one of the largest mobile broadband companies and will continue to compete against telecommunications giants like Alcatel-Lucent.

One of the few consumer-based revenue streams that Nokia will hold onto once the acquisition closes is HERE Maps. Nokia has built up HERE since 2007 and it will still be able to sell location services in the future. Since the Devices and Services unit had struggled in recent years, Nokia may become a more efficient company by focusing solely on NSN and HERE Maps.

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