Nokia, Microsoft deal to complete on April 25

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NEW DELHI: Nokia and Microsoft on Monday announced that they would close their $7.2 billion deal on April 25. The announcement came around a day after the leak of a letter Nokia had sent to its suppliers, telling them that its phone division, which Microsoft had bought for $7.2 billion, would be now known as Microsoft Mobile.

“Nokia expects the transaction whereby the company will sell substantially all of its Devices & Services business to Microsoft to close on April 25, 2014. The transaction is now subject only to certain customary closing conditions. The transaction was originally announced on September 3, 2013,” said Nokia.

Microsoft added that the deal now also included Nokia’s online assets. “Our two companies have agreed that Microsoft will manage the domain and social media sites for the benefit of both companies and our customers for up to a year,” said Brad Smith, executive vice president (legal & corporate affairs) at Microsoft.

Earlier, in a leaked letter to its suppliers, Nokia had noted that “upon the close of the transaction between Microsoft and Nokia, the name of Nokia Corporation/Nokia Oyj will change to Microsoft Mobile Oy”.

However, for the now the change in the name of the corporation may not lead to any branding changes in the market. As part of its deal with the Finnish company, Microsoft has bought rights to Nokia brand for 10 years. A Microsoft spokesperson clarified the deal allowed it to use Nokia brand for all categories of phones, including Lumia and Asha phones.

But Microsoft refused to confirm whether it would use Nokia brand name in all the phones it would sell after the closure of the deal or not.

Manasi Yadav, senior market analyst at IDC, said that if Microsoft changed the name, it might affect the sale of Lumia and Asha phones, at least temporarily, in markets like India.

“In a country like India, where Nokia has a very strong brand image, changing of name is likely to affect the sale of Lumia or Asha phones. While both Lumia and Asha range of phones have distinct identity, people associate them with Nokia. The box in which these phones are sold has Nokia printed on it. A change in brand name may confuse people,” said Manasi.

“Microsoft will have to do some marketing and awareness campaign to tell people that now Nokia will be known as Microsoft Mobile. Or people will find it unfamiliar. The good news is that it is definitely doable. Lenovo successfully managed the transition with IBM Thinkpad laptops so there is no reason why Microsoft could not do the same,” she added.

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