Microsoft closed its purchase of Nokia’s devices business today, the company announced.
Starting today, Nokia’s phone and tablet business will run as a division in Microsoft called the Devices Group. Stephen Elop, the former Nokia CEO, heads up the division as its executive vice president.
Microsoft announced it was buying Nokia for $US7.2 billion in September of last year, but the deal took several months to go through all the formal regulatory stuff before it was finalised today.
Nokia was the biggest seller of Windows Phones and pretty much the only company that took the platform seriously. Other manufacturers like Samsung and HTC tried to make Windows Phones, but they were mostly duds. (Although Samsung is rumoured to have a new Windows Phone soon.)
Nokia was once the biggest smartphone maker in the world, but was slow to adapt to the new generation of devices that came along after the original iPhone launched in 2007. Android phones eventually dominated the global market, but Nokia made the decision to use the Windows Phone software for its top-tier devices.
Microsoft’s former CEO Steve Ballmer was the biggest proponent of the Nokia deal. According to Businessweek, Ballmer had a shouting match with Microsoft’s board over the deal. He wanted to buy all of Nokia, including its mapping service. The board didn’t want any of it. In the end, they settled on just buying Nokia’s devices business, which makes smartphones and tablets. Microsoft now licenses Nokia’s mapping service. The Businessweek story intimated that the tensions over the Nokia deal caused Ballmer to decide to retire earlier than expected.
In February, before it was officially part of Microsoft, Nokia announced a new family of cheap Android devices called Nokia X. Those phones run a heavily modified version of Android and don’t include Google services like the Play Store for apps and other digital content. Instead, Nokia made its own store and included a lot of Microsoft services like Skype and Bing search.
But it was pretty clear at the time that Microsoft wasn’t happy Nokia decided to make an Android phone at a time when it was about to join Microsoft, which is all about Windows Phone. Windows Phone still has a very tiny market share compared to iPhone and Android, about 3% to 5% globally depending on who you ask. Android has about 80% of the global smartphone market.
Microsoft is trying to improve its market share by making it easier for manufacturers to make Windows Phones. It gives away the software essentially for free and redesigned it to run on very cheap hardware that’s attractive in emerging markets like Asia.
Meanwhile, Microsoft just introduced its latest version of Windows Phone, version 8.1, which includes a lot of features that matches what Android and iPhone users have enjoyed for years, including a digital assistant called Cortana.
And, in case you’re wondering, the proper way to announce Nokia is Knock-Ya.