This week finally provided answers to ongoing questions about the future of Vodafone's 45 per cent stake in Verizon Wireless and Nokia's devices unit. Some industry leaders are worried about the impact these deals will have on Europe's efforts to regain its lost leadership in mobile innovation.
BRUSSELS--Europe has been falling behind in mobile innovation, as illustrated by its low LTE penetration compared to the US, and recent events such as Microsoft's acquisition of Nokia's devices business and Vodafone's sale of its stake in Verizon Wireless will not help the region reverse this situation, according to Telecom Italia CEO Franco Bernabe.
Both the New York Times and AllThingsD have blow-by-blow accounts of Microsoft's decision to pay around $7.2 billion for Nokia's handset business and a license to its patents and mapping software. The nine-month saga began in January in a five-minute call from Microsoft CEO Steve Ballmer to Nokia Chairman and now interim CEO Risto Siilasmaa, according to the reports.
Another day, another million-dollar or billion-dollar deal. At least that's how this week seemed, and it's not even over yet.
Verizon Communications' $130 purchase of Vodafone's 45 percent stake in Verizon Wireless and Microsoft's decision to pay around $7.2 billion for Nokia's handset business were done for both strategic reasons and financial ones. And, as The Verge notes, the financial ones had a lot to do with fears about rising interest rates.
Microsoft's decision to pay around $7.2 billion for Nokia's handset business could put pressure on some of its other major OEM partners, such as Samsung Electronics and HTC, analysts said.
When Nokia completes the $7.2 billion sale of its struggling handset business to Microsoft in Q1 2014, its Nokia Siemens Networks (NSN) subsidiary will be able focus its attention on selling wireless infrastructure and emerging cloud-based service opportunities.
Nokia could pursue Android phone manufacturers over royalty payments once the deal to sell its devices and services unit to Microsoft has closed, as the Finnish company will retain ownership of its valuable mobile patent portfolio.
The "new Nokia" that will be left after Microsoft takes over the iconic handset maker's devices and services unit will be an infrastructure vendor and patent licensor with a growing presence in the cloud and network virtualization.
Microsoft CEO Steve Ballmer admitted that Nokia's Stephen Elop, a former Microsoft executive, is a candidate to replace him as CEO as he looks to step down sometime in the next 12 months.