page_title: Microsoft Mobile
section_title: 2011–2013: Partnership between Microsoft and Nokia
hierarchical_section_title: Microsoft Mobile / History / 2011–2013: Partnership between Microsoft and Nokia
caption_attribution_description: English: Nokia Lumia 800 with a protective shell
context_page_description: Microsoft Mobile was a subsidiary of Microsoft involved in the development and manufacturing of mobile phones. Based in Espoo, Finland, it was established in 2014 following the acquisition of Nokia's Devices and Services division by Microsoft in a deal valued at €5.4 billion, which was completed in April 2014. Nokia's then-CEO, Stephen Elop, joined Microsoft as president of its Devices division following the acquisition, and the acquisition was part of Steve Ballmer's strategy to turn Microsoft into a "devices and services" company. Under a 10-year licensing agreement, Microsoft Mobile held rights to sell feature phones running the S30+ platform under the Nokia brand.
  Originally Microsoft had established a major partnership with Nokia in 2011, in which the company exclusively produced smartphones using the Windows Phone platform, and promoted Microsoft services on its feature phone products. Microsoft also licensed Nokia Maps data for its own mapping services.
context_section_description: In February 2011, Nokia CEO Stephen Elop and Microsoft CEO Steve Ballmer jointly announced a major business partnership between the two companies, which would see Nokia adopt Windows Phone as the primary platform for its future smartphones, replacing both Symbian and MeeGo. The deal also included the use of Bing as the search engine on Nokia devices, and the integration of Nokia Maps into Microsoft's own mapping services. Nokia announced that it would still release one device running the MeeGo platform in 2011, but that it would devote fewer resources to future development of the platform, and would phase out Symbian entirely. Aligning with Microsoft had been considered a possibility by analysts, due to Elop's prior employment with the company.
  As Nokia was the largest mobile phone and smartphone manufacturer worldwide at the time, it was suggested the alliance would help Windows Phone, but from the beginning of 2011, until 2013, Nokia fell from #1 to #10 in smartphone sales. In June 2011, Nokia was overtaken by Apple as the world's biggest smartphone maker by volume. In Q2 2011, amid falling sales, Nokia posted a loss of €368 million, after having realized a profit of €227 million in Q2 2010. In September 2011, Nokia announced it would cut another 3,500 jobs worldwide, including the closure of its Cluj factory in Romania, after having cut as many as 7,000 the previous April. In August 2011 Chris Weber, head of Nokia's subsidiary in the U.S., stated that "The reality is if we are not successful with Windows Phone, it doesn't matter what we do [elsewhere]. He further added, North America is a priority for Nokia […] because it is a key market for Microsoft. On 26 October 2011, Nokia unveiled its first Windows Phone 7-based devices, the high-end Lumia 800 and the mid-range Lumia 710, at its Nokia World conference. After this announcement, Nokia's share price fell about 14%, its biggest drop since July 2009. Nokia's smartphone sales, which had been increasing, collapsed.
  Nokia reported sales "well above 1 million" of its Lumia line in 2011, 2 million sales for the first quarter of 2012, and 4 million for the second quarter of 2012, when Nokia sold only 600,000 smartphones (Symbian and Windows Phone 7) in North America. By comparison, Nokia had sold more than 30 million Symbian devices worldwide in Q4 2010 and the Nokia N8 alone had sold almost 4 million in its first quarter. In Q2 2012, 26 million iPhones and 105 million Android phones shipped, compared to only 6.8 million devices with Symbian and 5.4 million with Windows Phone. In announcing an alliance with Groupon, Elop declared, "The competition... is not with other device manufacturers, it's with Google." In June 2012, Nokia chairman Risto Siilasmaa told journalists that Nokia had a contingency plan in the event that Windows Phone failed, but did not specify what it was.
  On 8 February 2012, Nokia announced 4,000 layoffs at smartphone manufacturing plants in Europe by the end of 2012, to move assembly closer to component suppliers in Asia. On 14 June 2012, Nokia announced 10,000 layoffs globally by the end of 2013 and that it would shut production and research sites in Finland, Germany, and Canada, in line with continuing losses and the stock price falling to its lowest point since 1996. In total, Nokia laid off 24,500 employees by the end of 2013. On 18 June 2012, Moody's downgraded Nokia's bond rating to junk status. Nokia's CEO admitted that the company's inability to foresee rapid changes in the mobile phone industry was one of the major reasons for the problems. On 4 May 2012, a group of Nokia investors filed a class action against the company, as a result of disappointing sales. On 22 August 2012, it was reported that a group of Finnish Nokia investors were considering gathering signatures for the removal of Elop as CEO. In December 2012, to cut costs during a period of falling revenues, Nokia announced that it would be selling its headquarters, Nokia House, for €170 million, and leasing the use of it back long-term.
  In January 2013, Nokia reported sales of 6.6 mil
caption: Nokia Lumia 800, Nokia's first device running Windows Phone.
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