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Microsoft makes bet with $7.2B Nokia phone deal
Mobile computing » Microsoft aims to remake itself to play catch-up with Apple and Google.


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"Our aim is clearly to grow the networks business in a profitable way," he said in a call to investors. "It is a cash-generating business where we can invest into the future growth."

Nokia will continue to own the rights to its brand, but the deal between the two companies prevents it from venturing into a separate smartphone business until the end of 2015.

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Neil Mawston from Strategy Analytics said the move was good for Nokia’s shareholders but did not change much for the ailing Finnish firm, which has lost significant market share.

"Nokia is still heavily dependent on Microsoft’s software capabilities and Microsoft continues to lag the market like it has done in the last few years," Mawston said. "Not much will change whether Nokia is inside or outside the Microsoft portfolio."

The deal with Nokia represents the second most expensive acquisition in Microsoft’s 38-year history, ranking behind an $8.5 billion purchase of Internet calling and video conferencing service Skype. Tony Bates, who ran Skype, is also regarded as a potential successor to Ballmer.

The money to buy Nokia’s smartphones and patents will be drawn from the nearly $70 billion that Microsoft held in overseas accounts as of June 30.

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Michelle Chapman in New York and Jari Tanner in Tallinn, Estonia, contributed to this article.




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