Nokia Corporation (ADR) (NOK): Did Microsoft Corporation (MSFT) Just Buy a New CEO?

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Microsoft Corporation (NASDAQ:MSFT) just announced that it will acquire Nokia Corporation (ADR) (NYSE:NOK)‘s “Devices and Services” business for a total of 5.44 billion euros (roughly $7.2 billion).

As part of the deal, current Nokia CEO — and former Microsoft executive — Stephen Elop is stepping down from his post to become Nokia’s EVP of devices and services. He will move to Microsoft Corporation (NASDAQ:MSFT) when the transaction closes, becoming the head of its devices business unit.

Source: Nokia.

This news makes Elop the clear front-runner to succeed Steve Ballmer, who plans to retire as CEO of Microsoft Corporation (NASDAQ:MSFT) within the next 12 months. Thanks to his tenure at Nokia Corporation (ADR) (NYSE:NOK), Elop now has experience as the CEO of a major tech firm. Elop is also familiar with multiple aspects of Microsoft’s business; he oversaw Microsoft Office during his previous stint at Microsoft Corporation (NASDAQ:MSFT)  and will now be bringing the Nokia mobile business with him. Given Microsoft’s plans to become a “devices and services” company, Elop seems like the natural choice to be CEO.

Close collaboration
Ever since Elop left Microsoft to become Nokia’s CEO in 2010, he has seemed to be Microsoft Corporation (NASDAQ:MSFT)‘s ambassador to Nokia more than a fully independent chief executive. His mandate was to stem the bleeding in Nokia’s mobile business. Elop quickly took action, and opted to bet the farm on Microsoft’s new Windows Phone platform.

The decision to dump Nokia’s legacy Symbian OS was definitely the right choice. Symbian simply wasn’t built to keep up with the new competition: Apple Inc. (NASDAQ:AAPL)‘s iOS and Google Inc (NASDAQ:GOOG)‘s Android OS. Still, picking Windows Phone as Nokia Corporation (ADR) (NYSE:NOK)’s exclusive smartphone platform was an unorthodox move. After all, Android was available as a free alternative and already had captured a big chunk of the market.

Elop has continued to tighten the bond between Nokia and Microsoft Corporation (NASDAQ:MSFT). While other vendors like Samsung have introduced smartphones on the Windows Phone platform, Nokia has remained the dominant Windows Phone vendor, with a more-than-80% share. Moreover, Elop apparently continues to believe that Windows Phone will emerge as a global “third platform” against Android and iOS.

Meeting of the minds
There seems to be a clear meeting of the minds between Microsoft’s board and Elop. Both have signaled a strong commitment to the Windows Phone platform despite limited success thus far: Windows Phone held just 3.7% of the global smartphone market last quarter.

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