Assignment 2 - Bus 508

Microsoft’s Acquisition of Nokia

Ndoh Myles

Strayer University

BUS 508.041

Prof. JEAN FONKOUA

12 May 2014

Microsoft’s Acquisition of Nokia

This study describes the acquisition of Nokia by Microsoft Corporation. Microsoft is a company that specializes in the production and development of computer-related products. As a multinational organization, Microsoft performs support and licensing of these products in several countries since its establishment in 1975 by Bill Gates and Paul Allen. In contrast, Nokia is a company that specializes in telecommunication network, and information equipment and services. Fredrik Idestam and Leo Mechelin founded the firm in 1871, with its headquarters in Finland. According to Cox (2013), Microsoft Corporation bought Nokia for $ 7.2 in 2013, whereby it purchased the phone business plus its patent rights for the betterment of both companies. Each of the companies involved in the acquisition felt that it was the best thing to do under the prevailing circumstances. They needed to work as one entity in order to make it in the current competitive world.

Various circumstances led into the acquisition of Nokia by Microsoft Corporation. Although the announcement for Microsoft to acquire Nokia was made in 2013, the deal had been sealed through a partnership between both companies back in 2011. Nokia had earlier approached Microsoft Corporation requesting if they could use their services to improve their Smart Phone’s Operating System Platform. This had been caused by the continuous deterioration on Nokia’s sales over the years, making Nokia one of the worst performing phone companies in its history, in the telecommunications industry. After Microsoft agreed to the deal, Nokia started using Microsoft’s Operating System within its Lumia smart phones after giving up on the former Symbian OS (Cox, 2013). As Microsoft and Nokia enhanced their willingness to work together, crucial stakeholders supported...