With Nokia Acquisition, Microsoft Is Definitely a Devices and Services Company

The software behemoth makes its biggest bet on hardware ever.

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The notion that Microsoft might get really serious about smartphones by acquiring Nokia’s phone business isn’t news. It dates back to at least 2010, and the strategic relationship the two companies formed in February of 2011 only made it feel more likely.

And now it’s happening. Microsoft has announced plans to pay a total of $7.17 billion to acquire Nokia’s device and service arms, license patents and mapping technology from the Finnish firm. All of a sudden, Steve Ballmer’s mantra that Microsoft is becoming a devices and services company will apparently become a simple statement of fact rather than a somewhat confusing claim.

Here’s Microsoft’s official announcement. The company says that it’ll continue to license its Windows Phone operating system to other hardware makers, and that it expects the deal to close in the first quarter of 2014. Around 32,000 Nokia employees worldwide will become Microsoft employees, including Stephen Elop, the ex-Microsoft executive who is now Nokia’s CEO.

Lots more thoughts to come.