Microsoft Completes $7.2B Nokia Purchase, Officially a Smartphone Maker

Microsoft completed its purchase of Nokia's handset business on Friday, making the company not just a smartphone OS designer, but a smartphone builder, too. The deal gives Microsoft Nokia's handest business, plus a handful of top executives including former Nokia CEO Stephen Elop.

Microsoft completes Nokia handset business purchaseMicrosoft completes Nokia handset business purchase

The deal didn't get Microsoft everything it wanted because Nokia was forced to exclude its manufacturing plant in Chennai, India because the facility is part of tax issues Nokia is deal with in the country, and Masan plant in Korea was pulled from the deal by local regulators. Nokia committed to using its Chennai location to build smartphones for Microsoft, but will shut down its Masan plant.

Mr. Elop will run Microsoft's smartphone business, which means he isn't out of a job. Nokia said it will work to find new jobs for the 200 employees displaced by the Masan shut down, and will offer them financial assistance, too.

Nokia executives Chris Weber, Jo Harlow, Timo Toikkanen, and Juha Putkiranta will also be part of the new Microsoft smartphone team.

Completing the deal means Microsoft is in a stronger position to compete against Apple and Google's Android OS in the smartphone market, but it doesn't guarantee success. The iPhone and Android-based smartphones from companies like Samsung and HTC already dominate the market, and Microsoft hasn't had much success getting a foothold in the game.

Microsoft is now competing for marketshare with its own Windows smartphone partners, and they're the business that are most likely to suffer -- at least at first. Microsoft's own smartphone sales will likely eat into their slim piece of the smartphone market first before taking any share from Apple and Android.

Now that Microsoft is a smartphone maker, Nokia will focus on its networking business.