Sunday, September 15, 2013

What Microsoft Didn’t Buy


Nokia will continue to be a company outside of Microsoft and will retain rights to its brand and management thereof. If Microsoft were to buy all of Nokia, the acquisition cost would have been more than double what Microsoft paid for the devices side of the business and included many aspects of which Microsoft would wants no part. Eventually, Microsoft would eventually have to sell off those unwanted Nokia parts piecemeal. In this—better—arrangement, Microsoft will be able to license the Nokia brand for existing devices. The HERE Maps team will stay with Nokia. HERE Maps is a subsidiary of Nokia that employs about 6,000 people. Nokia will make HERE Maps available to Windows Phones and feature phones as part of a four-year license that Microsoft will pay for separately. This preserves a revenue stream for Nokia and also allows Nokia to sell HERE Maps and services to other companies. Microsoft didn’t acquire Nokia’s entire patent portfolio, either. It bought the design patents outright but will license Nokia’s 30,000 utility patents patents for 10 years. By not acquiring the entirety of Nokia’s patents, Microsoft was able to keep the acquisition cost of the Devices and Services down while preserving future assets for Nokia.

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