End game in handsets business...!

After Google acquired Motorala’s handset business, it’s now end game for Nokia. In an announcement, the troubled Finnish giant Nokia has said that it will be selling its handset business to Microsoft for $ 7.20 billion of (Euro 5.44 billion). Stiff competition from rivals like Samsung which replaced Nokia as the largest smartphone player globally and Apple’s iPhone besides local manufacturers in largest markets of China and India - Micromax, Karbon and others has resulted in Nokia gradually losing its hold on the handsets market.

Nokia dominated the mobile phone market for 14 years, until it was overtaken by Samsung in 2012 as the top-selling brand, as it struggled to establish winning business models and mobile devices. Nokia bet its future on its new Lumia smartphones, aiming to rival Apple's iPhone and Samsung's Galaxy.

The decision comes at an appropriate time when Nokia is losing its share on one hand, it is a move to stop further networth erosion and generating value at a time when it still has significant market share. For Microsoft the deal is welcome as it is trying to break into the handset market through its windows platform to take on rivals Google’s Android and Apple’s iOS platform. With convergence of devices happening – desktops, laptops, tablets to phablets, the deal will give Microsoft a presence across the board.

Nokia will grant the US software giant a 10-year non-exclusive license to its patents and will henceforth focus on network infrastructure and services, which it called “the best path forward for Nokia and its shareholders.” It has also announced announced the immediate departure of chief executive Stephen Elop, who was hired from Microsoft in 2010 to turn the company around. He will be replaced in the interim by Risto Siilasmaa, Nokia's chairman of the board. Some 32,000 Nokia employees are expected to transfer to Microsoft once the deal is concluded, including approximately 4,700 people in Finland.

Of the total purchase price of 5.44 billion euros, 3.79 billion relates to the purchase of Nokia's devices and services business, and 1.65 billion relates to the mutual patent agreement and future options. Nokia will book a gain on the sale of some 3.2 billion euros, which would certainly strengthen its financial position and it will provide a solid basis for future investment in Nokia's continuing businesses.
The sale to Microsoft is expected to be completed in the first quarter of 2014, pending approval by Nokia shareholders and regulatory authorities.

It now remains to be seen when Blackberry another troubled manufacturer hangs up its boots.