Microsoft struck a deal late Monday night to take over most of Nokia’s operations, including smartphone operations, for about 7.18 billion dollars. The deal is not expected to substantially increase profits overnight, but Nokia’s position in the cell phone world will benefit from the move. Microsoft’s employee staff will increase by about one third. Also included in the deal are Nokia’s patents, giving Microsoft full reign over Nokia designs.
Microsoft expects to gain the knowledge that Nokia posesses in hopes of gaining a competitve edge against leading competitors such as Apple and Samsung. Microsoft currently only has about a 3 percent market share in the smartphone business in the U.S. In 2011, Nokia and Microsoft had gone into a partnership together. With Nokia’s faltering position, the two companies decided that a complete acquisition was the best alternative for both companies. The deal is expected to close within the first three months of 2014.
This deal came shortly after Microsoft CEO Steve Ballmer made the announcement that he will retire as soon as a replacement is found. Nokia CEO Stephen Elop will be among the employees to come onboard as the companies merge, and is expected to be a possible candidate for the position. These changes may drastically alter the face of Microsoft, hopefully we will see some real technological offspring come from this marriage.