Tuesday, September 30, 2014
Microsoft is Gonna Acquire NOKIA !!!
Only a few years ago, NOKIA was the number one cell phone manufacturer. But current situation is really frustrating. Due to the growing competition in the market, lack of innovation, changing nature of the people, Nokias Market Share is now at the bottom. In this situation, Microsoft has agreed to purchase the business of Nokia.
The boards of directors of Nokia and Microsoft have decided to enter into a transaction. Microsoft will purchase all of Nokias Devices & Services business, patents, license and mapping services.
Nokia will get € 3.79 billion (Equivalent to $ 4.98 billion) for its Devices & Services business. And € 1.65 billion (Equivalent to $ 2.17 billion) will be paid by Microsoft to license Nokias patents. That means, Microsoft is to pay € 5.44 billion ($ 7.14 billion) in cash to buy Nokia. Microsoft will draw upon its overseas cash resources to fund the transaction. The transaction will be made in the first quarter of 2014 and subject to shareholders and regulators approval.
Stephen Elop, the CEO of Nokia, is expected to join Microsoft with Jo Harlow, Juha Putkiranta, Timo Toikkanen and Chris Weber at the closing of the transaction. At closing, 32,000 people are expected to be transferred to Microsoft, including 4,700 in Finland and 18,300 employees directly involved in manufacturing, assembly and packaging worldwide.
Win-Win Situation for All
This transaction will generate a win-win situation for employees, shareholders and consumers of both companies.
Nokias Benefit
Nokia has a very little chance to recover its reputation and position in the market. Its almost out of competition. Innovative devices from Samsung and Apple will hardly allow Nokias products to compete in the market. But Lumia, operated by Windows 8 OS, has a chance to compete with Apple and Samsung Devices. When Microsoft will acquire all of Nokias Smart Phones including Lumia, definitely the devices will be much improved. Thus it could be a good come back for Nokia.
Microsofts Benefit
Two decades ago, Apple was beaten by Microsoft in Personal Computer Business. Due to the huge popularity of Windows, Apple Computers were not preferred by the users. But the scenario has changed with the passage of time.
Now people like mobile devices like cell phones and tablets. Most of the PC users are no longer interested to purchase desktop PCs. They are switching to Samsungs Galaxy Tabs and Apples i Pads Consequently the sale of Windows OS falls dramatically. Microsofts new OS, Windows 8, was not sold as expected.
To retain market share, Microsoft should focus on mobile devices. Following this theory, Microsoft has introduced its first tablet device - Surface. Earlier, Microsoft also produces Windows phones but they were not successful.
When Microsoft failed with Mobile Devices again and again, it decides to purchase Nokia.
Good News for the Fans
This is a good news for the fans of both companies. Because Nokia lovers will get more innovative products. And Microsoft users will get better mobile devices. And I personally believe, Microsoft and Nokia together, will produce good devices and provide better services to the valued customers.
This transaction is considered as a business strategy for both companies. Both companies have a chance to come back in the market. As the PC market is down, Microsoft must grab the tablet market. And due to the huge competition and changing tastes of the people, Nokia must go for the innovation. So, there is no alternative to change. This acquisition is the demand of time.
What next? Wait and see - what the two do next . . .
This transaction is considered as a business strategy for both companies. Both companies have a chance to come back in the market. As the PC market is down, Microsoft must grab the tablet market. And due to the huge competition and changing tastes of the people, Nokia must go for the innovation. So, there is no alternative to change. This acquisition is the demand of time.
What next? Wait and see - what the two do next . . .
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