Microsoft is going to acquire finish cellphone company Nokia for $7.2 Billion.
If you has eye on Tech News then probably you have heard about Nokia’s story last night. This news is a Major turning point in the history of Android.
CEO Microsoft Company, Steve Ballmer said Microsoft would buy the Finish cellphone company for $7.2 billion. Microsoft will pay $5 billion for Nokia unit that makes mobile phone along with the Lumia series smartphones that run Windows Phone software and Microsoft will also pay for $2.2 billion for a 10 year license to use Nokia’s Patents with the option to extend it indefinitely. Microsoft said it is acquiring Nokia’s Asha brand of low to mid level smartphones and will license the Nokia brand for current Nokia mobile products.
The focusing statement is that both companies said in joint, this deal will allow the Microsoft Company to extend its services in term of Nokia’s mobile phones to serve as an channel to Windows Phone around the World. An Analyst at Gartner said, “Microsoft can not walk away from smartphones and hope that other vendors will support Windows Phone is fading fast. So buying Nokia comes at right time.”
A short Nokia Story:
In 2007 Nokia was expended in 40% of hand set market in 2007 but Now it has only 15% market in handset and only 3% in smartphones market, which is amazingly low as it is an old competitor. Nokia reached to its worth 200 billion euros in past peaked times but unfortunately now the whole Nokia Company has only worth about 15 billion euro. As we know, in three years under Nokia’s Canadian boss Stephen Elop, Nokia saw its market share collapse and even its share price level shrivel. In 2011 Nokia lacked the in house technology and needed to jump off a “burning platform”. Elop made this decision to use Microsoft’s Windows Phone for smartphone, rather than Nokia’s own software or Google’s ubiquitous Android operating system.
We will learn in today’s market fluctuations that vertical integration is also a way forward for a company to succeed. But we have mostly concern with the Nokia’s product as it is base which will make Nokia to boom or slump (failure). Nokia is now a part of what they grew up in Market that why this deal will make emotional at first look. But it will make opposite reaction if Nokia comes back again to its peaks, but we have to wait for it.