Here's Why Microsoft Bought Nokia's Phone Business

By Joe Tenebruso and Eric Bleeker – Sep 15, 2013 at 10:50PM

NASDAQ: MSFT

Microsoft

Market Cap

$2,965B

Today's Change

(-2.45%) -$10.02

Current Price

$399.04

Price as of April 25, 2024, 4:00 p.m. ET

This is what was really behind Microsoft's purchase of Nokia's handset business.

Technology research firm Gartner (IT -1.05%) released a report stating that by 2017, shipments of devices using Google's (GOOGL -1.97%) Android operating system are expected to dwarf shipments of Windows-powered devices. In a last-ditch effort to get back in the race and stem the tide of Google's surging market share, Microsoft (MSFT -2.45%) purchased Nokia's (NOK -0.27%) handset business and related patents for approximately $7 billion.

In the following video, Motley Fool analysts Joe Tenebruso and Eric Bleeker discuss why it appears Microsoft may have already lost the race to Google and Apple (AAPL 0.52%), and that this latest acquisition may turn out to be another in a long line of mistakes for the fallen king of software.

Eric Bleeker, CFA, and Joe Tenebruso have no position in any stocks mentioned. The Motley Fool recommends Apple, Gartner, and Google and owns shares of Apple, Google, and Microsoft. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.