Boston, MA 04/16/2014 (wallstreetpr) – Nokia Corporation (ADR) (NYSE:NOK) received regulatory approval from China to sell its flagship business to Microsoft. It gives big relive for the Company to get a green signal across major markets without any compliance issues. The Company expects authorities across the U.S., Europe and China that may challenge Nokia’s compliance under standard essential patents (FRAND undertakings).
In September 2013, Nokia plans to sell its product and services business to Microsoft Corporation (NASDAQ:MSFT) for $7.4 billion. However, it requires regulatory approvals from different countries due to potential growth over its patent portfolio. The Company has already received positive response from the U.S. and European Union and the recent approval from China’s regulators clear the path for the transactions. Now, Nokia and Microsoft expect to close the deal by April 2014.
Why sell
Nokia Corporation (ADR) (NYSE:NOK) lost its dominating position to Samsung which accounts ~25% of total mobile phone market, according to IDC report. But, Nokia has more than 30,000 patents related to mobile technology that worth around $4-$14 billion. The industry believes that Nokia’s mobile technology may have promising market potential. However, the growing popularity over smartphone put Nokia in the back seat as it does not fit the smartphone market. Therefore, Nokia is selling its device business to Microsoft to offer the embedded services through its devices.
What next
Smartphone market will drive the business with growing demand from emerging markets. Samsung partnered with Google Inc (NASDAQ:GOOG) for Android to offer variety products with excellent features. Strong presence in the emerging market drives growth for Samsung’s smartphone at an affordable price. Therefore, Samsung gains popularity and accounts more than 31% of the global market in 2013 and expects to increase further in coming years. In the high-end segment, Apple continues to maintain its position with owned iOS and expects to see moderate growth in the future.
Microsoft Corporation (NASDAQ:MSFT)’s Windows phone is gaining share among the smartphone operating systems and expects ~30% unit growth in between 2014-2018, according to IDC. Microsoft will increase opportunities for Windows phone through the alliances with Nokia Corporation (ADR) (NYSE:NOK) due to solid existence and well known brand among vendors and customers in the emerging market.
