By now you’ve likely heard that Microsoft has bought Nokia. So what does this mean exactly? Simply put, Nokia has sold off its devices and services divisions – note, Nokia will retain the HERE brand and the navigation services and Microsoft will license HERE and other patents from Nokia.
Some of the other terms of the $7+ Billion dollar deal include:
- MS gets devices and services and will license patents
approximately 32,000 people are expected to transfer to Microsoft
- Nokia’s CTO (Chief Technology Office) organization and patent portfolio will remain within the Nokia Group
- The operations that are planned to be transferred to Microsoft generated an estimated EUR 14.9 billion, or almost 50%, of Nokia’s net sales for the full year 2012
- There will be 2 finanically strong companies in Finland
As part of the transaction, Nokia will grant Microsoft a 10 year non-exclusive license to its patents as of the time of the closing
Microsoft has agreed to make immediately available to Nokia EUR 1.5 billion of financing in the form of three EUR 500 million tranches of convertible bonds to be issued by Nokia maturing in 5, 6 and 7 years respectively
- Microsoft has agreed to a 10 year license arrangement with Nokia to use the Nokia brand on current Mobile Phones products
- Microsoft has agreed to a 10 year license arrangement with Nokia to use the Nokia brand on current and subsequently developed products based on the Series 30 and Series 40 operating systems
- Microsoft will become one of the biggest licensees of the HERE platform
- Nokia will continue as a Global company
- the transaction requires shareholder approval and is expected to be finalized in Q1 2014
- Stephen Elop will go to Microsoft
So what now for Nokia?
Following the transaction, and an emotional one for Nokia it was, Nokia plans to focus on its three established businesses, each of which is a leader in enabling mobility in its respective market segment: NSN, a leader in network infrastructure and services; HERE, a leader in mapping and location services; and Advanced Technologies, a leader in technology development and licensing. Nokia will retain its headquarters in Finland and perhaps most interesting, @Nokia is now a mapping company and location-based services provider, plain and simple!
A press conference was held and is archived online. Much talk was about Finland, including details of a new data center that will be built there, and discussion of how Microsoft would not be bailing on Finland and that the country need not worry about the effects of this transaction – one has to wonder how this will all turn out! Oh, FYI Nokia will be looking for a new CEO…
For more details I suggest you read The Next Chapter: An open letter from Steve Ballmer and Stephen Elop