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Microsoft buys Nokia for $7.2bn and will license patents and services

04 Sep 2013 News
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Microsoft buys Nokia for $7.2bn and will license patents and services

Nokia and Microsoft have announced that they’ve entered a mutual agreement that’ll result in Microsoft purchasing Nokia’s Device and Services business for $7.2bn. This will also include licensing for Nokia’s HERE mapping service which will probably end up being integrated into the Windows Phone Platform.

This news has increased Nokia’s share price considerably (up 31 percent on market close, 3rd September) and is probably the best result for Nokia, which has seen several years of losses. Microsoft also stands to gain from this as the company will be able to focus on the hardware side of Windows Phone more closely. Microsoft will also be able to acquire over 8,500 design patents and 30,000 utility and patents pending so developers can create more interesting hardware.

Microsoft has promised that it won’t turn Windows Phone into an in-house OS: other manufacturers are still welcome to develop hardware for it although it’s unlikely they’ll want to. Windows Phone only has 3.5 percent of the U.S. smartphone market and the vast majority was already Nokia. Both HTC and Samsung are unlikely to launch another Windows Phone since they’re seeing better results with Android.

The deal hasn’t been finalized but it’s almost certain it’ll go through. If it fails then Microsoft will be subject to a $750m termination fee.

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matt

Matt is a technology enthusiast, particularly surrounding smartphones and Apple products. Living in the UK, Matt passionately follows all of the latest news on Apple from across the globe.