Microsoft has reached an agreement to acquire the business of Nokia, including services and handset models. The $7.2 billion deal is an attempt to boost Microsoft's business into the mobile realm that it has largely sat out of.
Microsoft and Nokia made the announcement on Monday that some 32,000 Nokia employees would be joining the Microsoft team as a result of the deal. This means that as Microsoft pushes forward with phones that run its Windows 8 operating system, it will be on handsets made by Nokia.
The biggest news from this deal may be that Microsoft may have found its replacement for Steven Ballmer in Sephen Elop.
Ballmer, Microsoft's chief executive, announced last week that he would be leaving the company for retirement sometime within the next 12 months. Since then speculation has been rampant about who would replace the CEO. Now Stephen Elop, former Microsoft executive himself, has stepped up. Elop was running Nokia until the deal was signed. Now he will rejoin Microsoft after the transaction is closed, which will set him up nicely as a potential replacement for Ballmer, according to the New York Times.
"This agreement is really a bold step into the future for Microsoft," Ballmer said in a telephone interview from Finland. "We're excited about the talent capabilities it will bring to Microsoft."
Nokia will benefit greatly form the deal as well. The Finnish cell phone making company has seen its sales plummet thanks to the rise of smartphones. Previously, as early as 2010, the company held 64 percent of the market in China. Now that number has plunged to one percent. As companies like Apple and Samsung divide the smartphone market with iOS and Android operating systems, Nokia and Windows' partnership will help the third smartphone competitor, Windows Phones, have the hardware to match the software.
