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Microsoft Goes All in and Buys Nokia's Device Business in $7.17 Billion Deal

The stunner of a deal thrusts Microsoft right into the vicious heart of the smartphone and tablet markets
Ballmer (left) and Elop at a 2012 Windows Phone event in New York
Ballmer (left) and Elop at a 2012 Windows Phone event in New YorkPhotograph by Jin Lee/Bloomberg

Say what you will about Steve Ballmer. The man knows how to make an exit. Just days after declaring his imminent retirement, Ballmer has given the go ahead for Microsoft to purchase Nokia’s devices and services business along with licenses to Nokia’s patents for about $7.17 billion in cash. The stunner of a deal ends Microsoft’s flirtation with becoming a hardware maker and thrusts it right into the vicious heart of the smartphone and tablet markets.

Microsoft announced the deal late Monday night, saying the boards of both companies had approved the agreement, which is expected to close by the first quarter of next year. Microsoft and Nokia were already the closest of friends, with Nokia standing as the major seller of handsets based on the Windows Phone software. The partnership has not panned out as well as either company hoped: The Windows smartphones hold a tiny fraction of the device market, when compared to products from Apple and those based on Google’s Android software.