Skip to main content

Nokia sale is a good deal for both parties

As Microsoft sets out to buy Nokia, CNN takes a look through some of the Finnish mobile giant's unique designs. Pictured here is the Nokia Mobira Cityman, announced in 1989. As Microsoft sets out to buy Nokia, CNN takes a look through some of the Finnish mobile giant's unique designs. Pictured here is the Nokia Mobira Cityman, announced in 1989.
HIDE CAPTION
Nokia through the ages
Nokia through the ages
Nokia through the ages
Nokia through the ages
Nokia through the ages
Nokia through the ages
Nokia through the ages
Nokia through the ages
Nokia through the ages
Nokia through the ages
Nokia through the ages
Nokia through the ages
Nokia through the ages
Nokia through the ages
Nokia through the ages
<<
<
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
>
>>
STORY HIGHLIGHTS
  • Nokia had a tough few years before Elop slowly started to turn it around, says Stuart Miles
  • Deal will benefit Microsoft the same way that making smartphones has for Apple, he says
  • Not much will change in the short term, but Surface tablet "likely to be rebranded or ditched"
  • Microsoft's ambition to become hardware company is well and truly realized, Miles says

Editor's note: Technology journalist Stuart Miles is CEO and founder of gadget review website Pocket-lint. He can be found tweeting at @stuartmiles.

London (CNN) -- It's the deal that's been rumored since Stephen Elop joined Nokia from Microsoft three years ago, and now it's become reality. Microsoft is to buy Nokia, and become a phone manufacturer ... for the second time.

That's right, Nokia isn't the first phone company to be bought by Microsoft. It bought Danger in 2008, which it then used to launch the Microsoft Kin phone. That effort lasted around nine months before the whole adventure got canned and the world moved on.

This time around promises to be different.

Microsoft to buy Nokia's phone business

Nokia, which was the number one seller of mobile phones globally in 2007, had a tough few years before the stewardship of Elop slowly started to turn it around.

Who will replace Ballmer at Microsoft?

Watch more: Microsoft to buy Nokia's phone business

The Lumia range, which now includes half-a-dozen handsets, is still a minnow in the smartphone world in terms of market share, but it is slowly gaining traction. More and more people are going Lumia.

Since its rebirth, Nokia has over taken BlackBerry in around 34 markets, according to the company, and things are looking up following the success, in relative terms, of its latest batch of Lumia handsets.

The race is far from won, but at least, unlike BlackBerry, it is heading in the right direction.

The deal will likely benefit Microsoft in the same way creating and making smartphones has for Apple. The Cupertino-based company has for the past six years been able to make phones, market them, and sell them in its own stores.

As retailers throughout the last century can show (Marks & Spencer, Sainsbury's and Dixons in the UK,) if you make and sell your own products, the margins can be higher, and the profits better.

As the world's austerity drive continues, every little bit helps, and Microsoft will be able to reap those rewards even more once it owns Nokia outright.

So what next for both parties? Well not much is likely to change in the short term, but Nokia will more than likely move into the tablet arena a lot quicker.

Likewise, Microsoft's Surface tablet is likely to be rebranded or ditched completely, in favor of something more Nokia-flavored. Microsoft will license the Nokia name for the next 10 years.

Then there is the former Nokia CEO, Elop. Microsoft's CEO Steve Ballmer has announced that he'll be stepping down over the next year, and Elop will surely have his sights firmly set on replacing him.

Elop stepped down as Nokia's CEO on Monday to become the head of the company's devices and services business. He will continue leading Nokia's phones business as the devices chief at Microsoft.

Whether you believe Nokia has done well or not, Elop has done a fantastic job at Nokia, and there's very little stopping him. Being a Microsoft employee will only help his cause.

Perhaps Steve Ballmer wasn't such a bad CEO after all, especially considering that the $7.2 billion price tag for Nokia is less than the $8.5 billion it paid for Skype. This deal has just as much, if not more potential.

But ultimately, by buying Nokia, Microsoft's ambition to become a hardware company is well and truly realized.

The opinions expressed in this commentary are solely those of Stuart Miles

ADVERTISEMENT
Part of complete coverage on
updated 8:31 AM EDT, Fri August 22, 2014
James Dawes: Evil is the strongest word we have to prepare ourselves to kill others.
updated 9:59 PM EDT, Fri August 22, 2014
As protests over the shooting of an unarmed black teen calmed down, the question remains: Where's the police officer who pulled the trigger?
updated 5:22 AM EDT, Fri August 22, 2014
CNN's Tim Lister: Getting rid of ISIS will be tougher than taking on al Qaeda.
updated 8:42 PM EDT, Thu August 21, 2014
American patients infected with Ebola are being released from the hospital. What now?
updated 6:48 AM EDT, Fri August 22, 2014
One of the first observers at the MH17 crash site in Ukraine describes the harrowing scene.
updated 9:53 AM EDT, Thu August 21, 2014
Five survivors of acid attacks capture India's attention with a "ground breaking" photo shoot.
updated 8:19 AM EDT, Wed August 20, 2014
In an exclusive CNN interview, Lance Armstrong admits to having a "f**k you" attitude.
updated 8:36 PM EDT, Tue August 19, 2014
The pain that Michael Brown's parents are going through is something Sybrina Fulton can relate to. She, too, lost a son in a controversial shooting.
updated 7:49 AM EDT, Fri August 22, 2014
Cristiano Ronaldo of Real Madrid gestures during the UEFA Super Cup match between Real Madrid and Sevilla at Cardiff City Stadium on August 12, 2014 Cardiff, Wales.
"We are like one grain of sand against a whole beach," says Eibar fan Unai Eraso.
CNN joins the fight to end modern-day slavery by shining a spotlight on its horrors and highlighting success stories.
Browse through images from CNN teams around the world that you don't always see on news reports.
updated 6:22 AM EDT, Fri August 22, 2014
From fierce protests in Ferguson, to an Ebola survivor discharged from a hospital in Atlanta, browse through the photos of the week.
ADVERTISEMENT