Microsoft, Nokia Deal Receives Final Approval From China

 
 
By Michelle Maisto  |  Posted 2014-04-08 Email Print this article Print
 
 
 
 
 
 
 

Microsoft's acquisition of Nokia's phone division has been delayed pending one final approval—which has now come through.

Microsoft's purchase of Nokia's Devices and Services business has been approved by the Chinese Ministry of Commerce (MOFCOM), the final organization required to give the deal its blessing.

Microsoft originally expected the deal to be completed during the first quarter of the year, but on March 23 pushed the expected closing date to sometime in April. While it had received approvals in 15 markets on five continents, "certain anti-trust authorities in Asia … are still conducting their reviews," Nokia said in a statement.

The holdup was due to MOFCOM's concerns that Microsoft would change certain business conditions related to licensing, Microsoft explained in an April 8 statement.

"There was an important principle with which MOFCOM approached these discussions from the beginning: Any commitments should be focused on how our future conduct might change after we own the Nokia Devices and Services business, and should not impact our licenses signed in the past or historical practices," David Howard, Microsoft corporate vice president and deputy general counsel of Litigation and Antitrust, said in the statement.

Since Microsoft has no intention of changing its practices after it acquires the Nokia assets, Howard added, "We were happy to discuss commitments on this basis."

Howard concluded that Microsoft is "very pleased" to have made this critical step forward and is looking forward to completing the deal.

Microsoft's Nokia Phones

Microsoft and Nokia formed a partnership in February 2011, after an ailing Nokia, fast losing its once industry-leading market share, made a leap from the Symbian operating system to Microsoft's then-new Windows Phone OS. 

Windows Phone-running Nokia smartphones got a slow start in the market but have begun gaining some sales momentum. Aided by the failures of the BlackBerry brand, Windows Phone is now the third-place mobile platform.

During the three months ending February 2014, comScore reported April 6, Google's Android was on 52 percent of global smartphones, Apple's iOS on 41 percent, and Windows Phone on 3.4 percent, while BlackBerry fell to 2.9 percent.

(During the previous quarter, BlackBerry had clung to third place, with a 3.5 percent share to Microsoft's 3.1 percent.)

Nokia recently introduced its first Android-running family of phones, the Nokia X, X+ and XL. (Reportedly, it began working on the phones before it reached a deal with Microsoft.)

The phones are proving popular in China, according to Chinese site JD.com, which reported March 25 that the Nokia X "sold out in under 4 minutes" the day it was offered in China.

While any Nokia success with Android would seem to be in conflict with the Microsoft brand, it's perfectly in sync with the software maker's bottom line. Thanks to its patent holdings, Microsoft makes a profit on every Android device sold. 

Microsoft, in its April 8 statement, added that during MOFCOM's lengthy review process, the Chinese organization concluded that Microsoft owns approximately 200 patent families necessary to building an Android-running smartphone.

 

Follow Michelle Maisto on Twitter.

 
 
 
 
 
 
 
 
 
 
 
 
 

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