Microsoft decision pay around $7.2 billion for Nokia's devices and services unit and a license to its patents and mapping software is being cast by analysts as a bold but risky bet that could leave the two companies more isolated in mobile than they were before the deal.
Microsoft announced it will pay around $7.2 billion for Nokia's mobile phones business and a license to its patents and mapping software. Under the agreement, Microsoft will acquire around a third of Nokia's roughly 88,000 employees and much of its Lumia smartphone and Asha feature phone business.
Nokia's head of developer relations, Marco Argenti, said he is leaving the company after five years and taking a position with Amazon's web services team, dealing a blow to Nokia as it continues to try to gain traction with Microsoft's Windows Phone and its own Asha platform.
Nokia's $2.21 billion purchase of Siemens' 50 percent stake in their Nokia Siemens Networks joint venture is less than analysts had reportedly been expecting, leading many to conclude that Nokia got the share for a bargain. The questions multiply from there: Will owning the networks business inject enough strength into Nokia's balance sheet, and what will the long-term future of the business be?
Amid all the scrutiny on its high-end Lumia Windows Phone smartphones, Nokia is apparently providing a master lesson in how to make a profit from a basic mobile phone that costs only €15 ($20).
Microsoft and Nokia held talks as recently as this month on a sale of Nokia's mobile devices business to Microsoft, but the talks broke down and are not likely to be revived, according to a report in the Wall Street Journal.
Symbian was once the biggest mobile operating system in the world, but Nokia appears set to stop new shipments of devices based on the Symbian OS this summer as sales taper off.
Nokia cannot afford to lose its nerve now despite calls for a Plan B from some irate shareholders. It needs to keep its focus and not undermine its best efforts.
The jury is still out on the future of Nokia. The company still has a lot of support in its home market from domestic investors and that will be crucial in the months ahead, but patience is clearly running out.
Nokia's Lumia Windows Phone business often gets most of the attention when it comes to discussing the company's strategy, but the Finnish handset maker recently shifted the focus back to its low-cost Asha phones.