Microsoft buys Nokia for $7.2billion in latest attempt to edge out Apple in phone and tablet market

IT WAS once the phone in everyone’s pocket, but now Nokia has been bought out by computer corporation Microsoft.

The US firm is paying £4.6billion for the Nokia conglomerate’s phone-manufacturing division as it attempts to wrest the mobile  market from Apple, Samsung and Google.

Nokia, which was the world leader in mobile phones for 14 years, selling one billion handsets since 1982, has fallen behind in the era of the smartphone.

Acquired: Nokia CEO Stephen Elop, left, with Microsoft CEO Steve Ballmer in February 2011. Mr Ballmer announced Monday that Microsoft would buy the Finnish cellphone company for $7.2billion

The Finnish company’s handsets, such as the Lumia series, already use Microsoft’s Windows system.

The firm has been outstripped by both Samsung, which uses Google’s Android software, and Apple’s iPhone, which runs on Apple’s own system. Only 7million phones running on Windows were sold in the second three months of 2013, compared with 31million iPhones and 187million on the Android software.

 

In Nokia’s heyday, its unmistakeable ringtone, an excerpt from a 1902 composition called Gran Vals, became the signature sound of the first mobile-phone generation.

Microsoft rose to international ubiquity with its Windows operating system for personal computers and is now trying to follow Apple’s lead by combining production of software and gadgets. As well as developing Windows for smartphones, it has launched the Surface tablet to compete with the iPad.
Microsoft chief executive Steve Ballmer described the Nokia purchase as ‘a signature event’.

He said: ‘It’s a bold step into the future – a win-win for employees, shareholders and consumers of both companies.’

Some 32,000 Nokia employees will be transferred to Microsoft, which currently has about 99,000 workers.

Mr Ballmer said: ‘Finland will become the hub and centre for our phone R&D and we are counting very much on the incredible talent of Nokia employees to be a key part of propelling Microsoft forward.’

The price consists of around £3.2billion to purchase Nokia’s mobile-phone manufacturing business and another £1.4billion to pay for a ten-year licence covering the use of Nokia’s patents, with the option of an indefinite extension.

Investors in Nokia, which is based in Espoo, near Helsinki, welcomed the deal, sending shares in the company up some 40 per cent.

Industry expert Chris Millington, the managing director of mobile phone company Doro, said: ‘My first reaction is: ‘Wow! The mobile industry is capable of such incredible change.

‘This means Microsoft will now have the platform to deliver its mobile strategy. For business users specifically, this really does signal a significant opportunity – especially for Nokia’s smartphone offering.’

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TOA MAONI YAKO HAPA CHINI