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Tuesday, September 3, 2013

Why Microsoft Is Buying Nokia In $7 Billion Deal

Pictured is the Nokia Lumia 925, released in May 2013. (Nokia)

Pictured is the Nokia Lumia 925, released in May 2013. (Nokia)

Microsoft is buying Nokia’s smartphones, as well as a portfolio of patents and services, in a $7.2 billion deal announced late last night.

“Devices help services and services help devices,” is how outgoing Microsoft CEO Steve Ballmer put it — meaning of course, that Microsoft is taking on the Apple model of integrating software and hardware.

Google took the same step by acquiring the cell phone division of Motorola in 2011.

The deal shows Microsoft hopes to become a serious competitor to both Apple and Google for mobile devices. For Nokia, the world leader in cell phones before Apple’s iPhone changed the landscape, the deal is an admission that the company needs a partner to compete.

With the Apple model for integrating software with hardware now the norm in the industry, what will it mean for consumers?

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