Microsoft Buys Nokia’s Phone Business

In a surprising move, Microsoft has gone and purchased Nokia’s phone business in an effort, presumably, to make the hardware work more harmoniously with their Windows Phone 8 software. The deal, which will cost Microsoft about $7.2 billion, also brings Nokia CEO Stephen Elop into the Microsoft fold.

Or should I say back into the fold. Elop was a Microsoft executive before leaving the company to head up Nokia, who has 32,000 employees that will also join him at Microsoft. Some have speculated that Elop will replace Steve Ballmer as CEO of Microsoft. Last month, Ballmer said he would retire within a year.

Balmer and Elop

Whether this move will be able to turn Microsoft’s smartphone fortunes around remains in doubt. Over the past six years, Google and Apple have gobbled up the lion’s share of the smartphone market, leaving Microsoft with a meager 3.3%.

Another problem Microsoft faces is the major reorganization Mr. Ballmer announced in July. Will that structural change, plus the addition of Nokia’s phone business prove to be too many changes at once for a company? That remains to be seen.

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