Microsoft Buys Nokia's Smartphone Business, Cements Also-Ran Status

The Citizen's Guide to the Future
Sept. 3 2013 10:40 AM

Microsoft Buys Nokia's Smartphone Business, Cements Also-Ran Status

Microsoft CEO Steve Ballmer shakes hands with Nokia chairman Risto Siilasmaa after Nokia announced the sale of its mobile phone unit to Microsoft for $7.2 billion, bringing to an end its days as a phone maker.
Microsoft CEO Steve Ballmer shakes hands with Nokia chairman Risto Siilasmaa after Nokia announced the sale of its mobile phone unit to Microsoft for $7.2 billion, bringing to an end its days as a phone maker.

Photo by Sari Gustafsson/AFP/Getty Images

Microsoft is buying Nokia's devices and services business in a bold, $7.2 billion bid to cement its status as an also-ran in the smartphone marketplace.

The Redmond giant once dominated the software industry but was late to the mobile-software party and was rapidly surpassed by Apple and Google. In the Nokia deal, it acquires a business that once dominated the smartphone industry but was rapidly surpassed by Samsung. Synergies, indeed!

Advertisement

When the deal closes in early 2014, Microsoft will get Nokia's whole smartphone business, including the Lumia brand, plus its mobile phones business, which includes the low-end Asha brand popular in India and some other developing countries. It will also get licenses to the Nokia brand, patents, and mapping services. Nokia, meanwhile, will retain ownership of its brand as well as its mapping, networking infrastructure, and R&D divisions. As the Verge notes, it will become a much smaller company, though also perhaps a more sustainable one.

Microsoft, meanwhile, will go from being a minor afterthought in the mobile devices and services world to a much larger afterthought. Google, Apple, and Samsung may not exactly be quaking in their boots this morning, but BlackBerry is pretty much screwed.

Microsoft's shares fell 5 percent on the news, while Nokia's soared 35 percent.

Future Tense is a partnership of SlateNew America, and Arizona State University.

Will Oremus is Slate's senior technology writer.

TODAY IN SLATE

Politics

The Democrats’ War at Home

How can the president’s party defend itself from the president’s foreign policy blunders?

Congress’ Public Shaming of the Secret Service Was Political Grandstanding at Its Best

Michigan’s Tradition of Football “Toughness” Needs to Go—Starting With Coach Hoke

A Plentiful, Renewable Resource That America Keeps Overlooking

Animal manure.

Windows 8 Was So Bad That Microsoft Will Skip Straight to Windows 10

Politics

Cringing. Ducking. Mumbling.

How GOP candidates react whenever someone brings up reproductive rights or gay marriage.

Building a Better Workplace

You Deserve a Pre-cation

The smartest job perk you’ve never heard of.

Hasbro Is Cracking Down on Scrabble Players Who Turn Its Official Word List Into Popular Apps

Florida State’s New President Is Underqualified and Mistrusted. He Just Might Save the University.

  News & Politics
Politics
Sept. 30 2014 9:33 PM Political Theater With a Purpose Darrell Issa’s public shaming of the head of the Secret Service was congressional grandstanding at its best.
  Business
Moneybox
Sept. 30 2014 7:02 PM At Long Last, eBay Sets PayPal Free
  Life
Gaming
Sept. 30 2014 7:35 PM Who Owns Scrabble’s Word List? Hasbro says the list of playable words belongs to the company. Players beg to differ.
  Double X
The XX Factor
Sept. 30 2014 12:34 PM Parents, Get Your Teenage Daughters the IUD
  Slate Plus
Behind the Scenes
Sept. 30 2014 3:21 PM Meet Jordan Weissmann Five questions with Slate’s senior business and economics correspondent.
  Arts
Brow Beat
Sept. 30 2014 8:54 PM Bette Davis Talks Gender Roles in a Delightful, Animated Interview From 1963
  Technology
Future Tense
Sept. 30 2014 7:00 PM There’s Going to Be a Live-Action Tetris Movie for Some Reason
  Health & Science
Medical Examiner
Sept. 30 2014 11:51 PM Should You Freeze Your Eggs? An egg freezing party is not a great place to find answers to this or other questions.
  Sports
Sports Nut
Sept. 30 2014 5:54 PM Goodbye, Tough Guy It’s time for Michigan to fire its toughness-obsessed coach, Brady Hoke.