Nokia shareholders have now approved the Nokia and Microsoft deal, the shareholders voted today in favor of Microsoft buying Nokia’s mobile phone and smartphone business in a deal worth $7.2 billion.
99.7 percent of the Nokia shareholders voted in favor of the deal, and these shareholders own around four fifths of Nokia shares. The deal will see former Nokia CEO, Stephen Elop, return to Microsoft, where he will be in the running for the Microsoft CEO job.
Nokia will keep the Nokia brand, and Microsoft will acquire Nokia’s Lumia Windows Phone brand as part of the deal. Sales of Nokia’s Lumia smartphones have been improving, with 8.8 million sold in the last quarter. This acquisition is seen as a strategic move by Microsoft to strengthen its position in the mobile market, which has been dominated by competitors like Apple and Google.
The History of Nokia and Microsoft Partnership
The two companies originally formed a partnership back in 2011, when Nokia agreed to produce Windows Phone smartphones. Unfortunately, the devices did not sell as well as the two companies had hoped. Despite the initial struggles, the partnership laid the groundwork for future collaboration and innovation. Nokia’s expertise in hardware combined with Microsoft’s software capabilities aimed to create a competitive edge in the smartphone market.
However, the market dynamics were challenging. Android and iOS were rapidly gaining market share, leaving little room for Windows Phone to establish itself. The partnership faced criticism for not being able to adapt quickly to the changing consumer preferences and technological advancements.
Future Prospects and Strategic Implications
It will be interesting to see what happens when Stephen Elop returns to Microsoft. He has been rumored to be considering significant strategic changes if he gets the CEO job, including potentially killing off Bing and selling off Microsoft’s Xbox unit. These moves could have far-reaching implications for Microsoft’s overall business strategy and market positioning.
Elop’s return to Microsoft could also bring a renewed focus on mobile and cloud services. With the acquisition of Nokia’s mobile division, Microsoft has the opportunity to integrate hardware and software more seamlessly, potentially leading to innovative products and services. The success of this integration will be crucial for Microsoft as it seeks to compete with established players in the mobile industry.
Moreover, the deal could impact Nokia’s future direction. With its mobile division sold, Nokia may focus on other areas such as network infrastructure and technology development. This shift could allow Nokia to leverage its strengths in these areas and explore new growth opportunities.
The acquisition also raises questions about the future of the Lumia brand. While Lumia smartphones have shown improvement in sales, they still face stiff competition from other brands. Microsoft’s ability to innovate and differentiate the Lumia line will be key to its success in the highly competitive smartphone market.
The approval of the Nokia and Microsoft deal marks a significant milestone for both companies. The acquisition presents opportunities for strategic realignment and growth, but also comes with challenges that need to be addressed. The future of Nokia and Microsoft will depend on their ability to navigate these challenges and capitalize on the opportunities presented by the deal.
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