Microsoft stands to benefit handsomely from paying just $7.2 billion to take over most of Nokia's mobile operations.

It’s a great price from Microsoft’s point of view, given that the sale price is less than the $8.5 billion Microsoft paid for Skype in 2011. 

In fact, the $7.2 billion will let Microsoft acquire most of Nokia's mobile operation – including the company’s smartphone unit. The deal also will let Microsoft license Nokia’s patents for $2.2 billion. Under the deal, Microsoft will get over 8,500 design patents, according to a Microsoft presentation. It will also own the Lumia and Asha brands. It will have a 10-year license to use the Nokia license on feature phones. Nokia’s patent portfolio includes some 30,000 patents or patent applications. It is particularly rich when it comes to wireless connectivity, Microsoft said.

And Microsoft will see a major increase in the number of its employees. Under the deal some 32,000 Nokia employees will join Microsoft – an increase of about a third. Among the new employees coming over to Microsoft, if the deal goes through, is Nokia CEO Stephen Elop, who could be a top contender to replace outgoing CEO Steve Ballmer. Elop used to run Microsoft's business software division. Elop will be known as Nokia Executive Vice President of Devices & Services in his new role at Microsoft.

Looking ahead, Ballmer’s successor, whoever it may be, will need to improve on the company’s current position in the competitive mobile market against such operating systems rivals Google and Apple (News - Alert) – and Elop will have the background to fill that requirement and make Windows more competitive in the sector. Microsoft also needs to prevent vendors from moving away to other companies when it comes to PCs and tablets, too. The deal could help on that issue, too. 

image via cnn.com

Microsoft is predicting the Windows Phone OS will have a 15 percent market share in 2018.

Looking ahead, Analysys (News - Alert) Mason principal analyst, Ronan de Renesse, predicted that with the $7.2 billion deal, “Microsoft will gain a foothold in developing market via Nokia’s non-Lumia device portfolio,” he said. He points out that 45.5 percent of Nokia mobile device shipments went to greater China, the Middle East & Africa and Latin America during 2012.  “This strengthens Microsoft’s position versus Google in connecting the next billion people,” he said, a reference to some emerging markets.

Nokia, meanwhile, predicted the deal will "provide a solid basis for future investment in its continuing businesses."

Nokia, which relies on the Microsoft Windows operating system for its phones, is well behind such leaders as Samsung (News - Alert) and Apple in market share.

“No handset manufacturer except Nokia has been fully committed to Windows Phone platform in the past 12 months. Maybe it’s time for Microsoft to abandon its Windows licensing model in mobile,” de Renesse speculated, as well.

HTC, Huawei and Samsung each are moving away from the Windows Phone operating system, opting instead for Android, Melissa Chau, an analyst with IDC (News - Alert), told PC World. Still, another industry analyst, University of Warwick (News - Alert) (UK) business school professor Ronald Klingebiel, said Nokia is doing the right thing by selling its phone business, and he wants to see Blackberry to do likewise.

In fact, he points out that when looking at recent history of Microsoft partnering with Nokia questions were raised about “Nokia’s rationale for dropping one unsuccessful Linux system for another unsuccessful proprietary system. … A distant third challenger proved hardly the boost to the business Nokia was hoping for. Some people connected the dots and asked whether Microsoft was really preparing to take over Nokia. This is where we are today," he said.

Meanwhile, in a company statement, Ballmer is very positive about the move.

“It’s a bold step into the future – a win-win for employees, shareholders and consumers of both companies. Bringing these great teams together will accelerate Microsoft’s share and profits in phones, and strengthen the overall opportunities for both Microsoft and our partners across our entire family of devices and services,” Ballmer said. “In addition to their innovation and strength in phones at all price points, Nokia brings proven capability and talent in critical areas such as hardware design and engineering, supply chain and manufacturing management, and hardware sales, marketing and distribution.”

“With this combination of talented people, we have the opportunity to accelerate the current momentum and cutting-edge innovation of both our smart devices and mobile phone products,” Elop added in the statement.

The deal is expected to close in Q1 of 2014, and it needs approval from Nokia shareholders.