Microsoft Scoops Up Nokia’s Phone Business [UPDATED x2]

When you think of the words “Windows Phone”, chances are you’re thinking of a Nokia product as they sell most of the Windows Phones on the planet. Microsoft clearly sees that as an opportunity to push the Windows Phone OS, so they bought the phone business off of Nokia for $7.2 billion:

The move reshapes Microsoft, adding consumer hardware – the Nokia handset business – to its PC software base. Nokia phones already use Microsoft’s mobile phone operating system. But it’s an open question whether Microsoft, which has never had great success in the mobile space, will emerge as a viable competitor to phone powered by Apple’s iOS and the Android systems used by Samsung and others.

“Today marks a moment of reinvention,” Microsoft CEO Steve Ballmer and Mr. Elop said jointly. “With the commitment and resources of Microsoft to take Nokia’s devices forward, we can now realize the full potential of the Windows ecosystem, providing the most compelling experiences for people at home, at work and everywhere in between.”

This sale highlights a number of things:

  • Microsoft is serious about becoming a player in the mobile phone space by trying to do what Apple has done by controlling everything from the hardware, to the software and their related services.
  • Anyone else who puts out a Windows Phone (HTC comes to mind as an example of this), is likely thinking of an exit strategy as they likely won’t be able to compete against Microsoft now that this purchase has happened.
  • This deal had persistent rumours floating around for some time. One wonders if the fact that it happened shortly after Microsoft CEO Steve Ballmer announced his retirement is connected in some way.
  • BlackBerry fans who were hoping that the persistent rumours of Microsoft buying BlackBerry can pretty much forget about that happening.

Nokia now becomes a telecom gear company which is far more profitable. As for Microsoft, let’s see how well this works out for them.

UPDATE: News.com has an e-mail to Microsoft employees from Steve Ballmer about the Nokia purchase.

UPDATE #2: The Verge is reporting that Microsoft wants to continue to license the Windows Phone OS to partners. We’ll see if that actually pans out.

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