Finnish handset manufacturer, Nokia Corporation (NOK) cleared another major hurdle by getting clearance from both the US Department of Justice (DOJ) and Federal Trade Commission (FTC) regarding the sale of its Nokia handset business to Microsoft Corp. (MSFT) for $7.2 billion (5.44 billion euros).
Nokia’s shareholders have already approved the deal. The transaction is expected to close in the first quarter of 2014, subject to EU approval.
Upon the completion of the transaction, it is to be seen how Microsoft differentiate with Nokia’s newly launched tablets and its own Surface tablets. As the inclusion of the Lumia 2520 tablet into its product portfolio may encourage cannibalism of both the devices.
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Earlier, stiff competition from Google Inc.’s (GOOG) Android-based smartphones and Apple Inc.’s (AAPL) iPhones compelled Nokia to collaborate with Microsoft to offer user-friendly Lumia smartphones powered with the Windows operating platform, thereby sidelining its own Symbian operating system.
Such strategic partnerships have aided Nokia improve to its smartphone sales. In the recently concluded third-quarter 2013, the company sold 8.8 million Lumia smartphones, up 40% from the prior-year quarter.
During this holiday season, Nokia launched its latest tablet and two new 6-inch smartphones, Lumia 1320 and 1520. Moreover, the company has launched 3 Asha flagship phones, Asha 500, 502 and 503, costing $69, $89 and $99, respectively. Thus, the company is expected to generate strong sales during the upcoming quarters.
Nokia currently carries a Zacks Rank #3 (Hold).