Almost eight months after Microsoft first revealed its plans to acquire Nokia’s device business the $7.2 billion dollar merger is finally complete. Both companies announced the news today, though there are still several loose ends still left to tie up before the integration is fully complete.
Microsoft will take over the Finnish company’s phone business, which produces more than 90 percent of the world’s Windows Phone devices along with a Windows RT tablet, the Asha series of feature phones, and the Android-powered Nokia X family. For now, Microsoft says its 25,000 new employees will remain relatively separate from the rest of company, with the division rebranded as Microsoft Mobile. Fully integrating the massive new team into the rest of the Redmond company will take time, and Microsoft’s first priority is to keep pumping out new smartphones without any noticeable production hiccups.
The deal, which Microsoft hoped to close by January 2014, didn’t go quite as smoothly as the companies had hoped. Although the merger is technically complete, Nokia will still operate one factory in South Korea and another in India as a contractor for Microsoft. The former Lumia-maker also says it expects the final payout will be “slightly higher” that the $7.2 billion originally announced last year.
Plenty of questions remain as both companies move forward. We can’t help but wonder whether Microsoft will shutter certain Nokia product lines, specifically the company’s Lumia 2520 tablet which technically competes against the firm’s own Surface products.
Meanwhile, Nokia has remaining arms that are expected to focus on three remaining businesses: its HERE mapping service, its network infrastructure, and licensing and development. Some have suggested Nokia could also transform into a powerful patent troll, armed with a war chest of mobile patents and no device business to hold it back.
It will be interesting to see how Nokia evolves without its hardware business, but all eyes are really on Microsoft. Whether the software-giant turned smartphone-maker can rise to the occasion and deliver a viable third operating system to compete with Android and iOS is still up for debate. But no matter what happens next it’s sure to be an interesting chapter in the story of Windows Phone.
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