What's Next After Nokia Hangs Up the Phone?

NEW YORK ( TheStreet) -- People are still stunned after Microsoft ( MSFT) finally made it official that it was acquiring Nokia's ( NOK) mobile phone business, along with Nokia's strong patent estate, for 5.44 billion euros ($7.2 billion). But the deal, I believe, has been in the works for more than two years.

Contrary to what investors wish to believe, there's no question that Nokia, which was in a cost-cutting mode for more than a year, was cleaning up its books in anticipation of this deal. By now, everyone should have had a chance to sort through the details. The only question is what happens next?

First and foremost, we have to agree that Nokia's phone business, which has struggled to compete against Apple ( AAPL) and Samsung ( SSNLF), has been a disappointment, if not a complete failure. But as I've said recently, that's Microsoft's problem now. Even after this deal, which is pending regulatory approval, is completed, Nokia will still have loose ends to tie up.

There's the issue of Nokia getting a new CEO -- the current one, Stephen Elop, will step down as soon as the deal closes. He'll become Executive Vice President of Devices & Services at Microsoft. Not surprisingly, rumors are flying Elop will replace Microsoft CEO Steve Ballmer, who has already disclosed his strategy of exit in the next 12 months. For now, Nokia Chairman Risto Siilasmaa will be the acting CEO while the company searches for a permanent replacement for Elop.

So for a company in Nokia's position that has just executed an "about face" in its business model, a lame-duck position in the CEO chair is not the type of overhang on which Wall Street thrives. Not to mention Elop is expected to bring with him four key Nokia executives, which would then leave the management cupboard bare and with little experience.

For Nokia investors, though, there's no question that they were the real winners in this deal -- regardless of who or what is left over to drive the company forward. That the company was able to secure $7.2 billion for a mobile phone business that has failed to muster any type of competitive edge against Apple and Google ( GOOG) was an impressive win for shareholders. Also, I believe Nokia escaped with perhaps the best deal it could have gotten from anyone on the market.

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