What's Next for Microsoft and Nokia?

Last night Microsoft announced plans to purchase Nokia's Devices and Services Unit for about $7.2 billion. The acquisition, which was in place before CEO Steve Ballmer announced his retirement, would give Microsoft ownership of Nokia's Lumia and Asha product lines and its patent portfolio. Additionally, Nokia CEO and president Stephen Elop would make his way back to Microsoft as the head of its Devices team — Elop was previously the head of Microsoft's Business Division from 2008 until he moved to his position with Nokia in 2010.

So what does this all mean for the future of Microsoft and Nokia? Well, while some things are clear, others are still up in the air or locked behind executive board room doors.

First off, if the deal goes through, don't expect to see a Nokia-branded smartphone any time soon. The Verge has pointed out that, under a 10-year license agreement, the Nokia brand can only be used with feature phones. The Lumia name that Nokia has built up over the last few years will likely still live on — as will its entry-level Asha brand — but will only be seen next to Microsoft's own branding.

Despite bolstering its mobile efforts as a result of the merger, Microsoft won't prohibit other smartphone makers from creating devices for the Windows Phone operating system. While Nokia-produced hardware will likely serve as flagship devices for the platform, Microsoft stated that "acquiring Nokia’s Devices group will help make the market for all Windows Phones, from Microsoft or our OEM partners." So, as of now, it appears that Microsoft is looking to keep a healthy relationship with Samsung and HTC, although involvment in Windows Phone from both manufacturers have been lacking as of lately.

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Microsoft hopes to triple its smartphone market share over the next 5 years.

And for those who were hoping to eventually see an Android smartphone with Nokia's hardware, don't hold your breath. As reported by AllThingsD, Microsoft hopes to triple its smartphone market share over the next 5 years with the help of Windows Phone and the Lumia line's steadily building momentum.

Nokia, in its entirety, is not part of the deal. The Finnish company would still exist and function, although would concentrate on services like network infrastructure for businesses and its Here mapping technology — the latter of which Microsoft will pay to use with its new products.

At this point its unclear how many Nokia employees will make their way to Microsoft's team. Gizmodo compiled responses from a few members of Nokia's staff and immediate reactions have been mixed.

Regardless of whether this MSFT move is for the best, it's an extremely emotional time for all of us at Nokia.

— John Kneeland (@SirKneeland) September 3, 2013

The acquisition plans also come at an interesting time in Microsoft's current leadership restructuring. When Ballmer announced that he would be leaving his role within the next 12 months, many speculated that Elop was one of the possible candidates as Microsoft's next leader. With his new involvement, as well as his prior experience with the company, the current Nokia CEO has an even stronger likelihood of being chosen for the position.

Unsurprisingly, Microsoft has been pretty mum about that decision. According to The Verge, Ballmer stated on a call that "[Microsoft's] board is going through a process open to internal and external candidates. It's a process that they wanted well-known so they could consider everybody internal and external. Stephen Elop happens to be going from external to internal but our board will consider everybody. They will do it in private — that's the right way for the board to conduct its business."

Regulatory approval of the acquisition will surely take some time to complete, and it will be even longer before we see the first Microsoft Lumia device, but the two companies are rumored to be announcing at least a few new products in the near future. The reported 6-inch Nokia Lumia 1520 is expected to make its debut this month, as is a new 10.1-inch Windows RT tablet made by none other than Nokia.

As more news roll out regarding Microsoft's acquisition of Nokia's Devices and Services Unit, make sure to stay tuned for IGN for the biggest updates.

Lead image credit: Phandroid

Justin is all about his family and his gadgets. Follow him on MyIGN or on Twitter at @ItsTheLingo.

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