Earlier this morning the news broke that Microsoft is buying the core of the Nokia phones business for $7 billion. There are still some regulatory approvals to overcome so the full impact of this announcement will not really start to make itself felt until later this year however…

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Steve Balmer and Steve Elop

• Stephen Elop will now be rejoining Microsoft from Nokia (along with most of the senior Nokia management) with responsibility for not just smartphones but all devices, including the Surface tablet

• The deal kills any rumours that Microsoft might pull out of the smartphones business

• The deal also kills any chance that Microsoft might rescue Blackberry

• By next year there will only be three global smartphone platform players: Android – Apple – Microsoft

• Never mind smartphones, this is also a strategic play by Microsoft to prevent any further erosion of its operating system market share which in recent years has dropped from 95% to 30% if you count connected devices including PCs, smartphones and tablets. See slide

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Here is the official Microsoft presentation (it's a 3.5Mb PDF) explaining the rationale for the acquisition www.microsoft.com/en-us/news/download/press/2013/StrategicRationale.pdf