On Monday, September 2, 2013 Microsoft announced that it is buying Finnish company Nokia’s phone service business for $7.2 billion. Microsoft will become the owner of smartphone and cellular handsets business of Nokia which it is paying $5 billion as well as the Devises and Services unit. Total price that Microsoft agreed to pay will include a $2.2 billion price tag for Nokia’s patents. This will give Microsoft the market leading Lumia line of smartphones which is run on Microsoft’s Windows Phone operating system.
Both companies are being considered laggards lately. Nokia commanded about half of the business of handheld phone market before Apple entered into the market place. Microsoft is highly counting on the purchase to get an entrance into the fast developing smartphone business so that it can battle industry leaders, Apple and Samsung. Microsoft is distant No. 3 worldwide smartphone business and its mobile software accounts for about four percent. So, it may also intend to derail the spread of Google’s Android in the smartphone arena. Microsoft is also getting one of its former star employees back with the purchase and many thinks that he may replace the outgoing CEO Steve Ballmer of the company in the near future.