Microsoft To Eliminate Nokia Name From Smartphones After $7.2 Billion Acquisition

After years of flirting, Microsoft Corporation (NASDAQ: MSFT) and Nokia Corporation (NYSE: NOK) made their relationship official Tuesday when Microsoft announced it would purchase Nokia’s mobile-phone business. In a Wednesday blog post, Nokia announced it would also be giving up its name.

It turns out that the $7.2 billion dowry from Microsoft also paid for the rights to the “Nokia,” “Lumia” and “Asha” brand names. It’s all part of Microsoft’s plan to streamline its branding, which was also a major focus of the company’s recent corporate restructuring.

“On smartphones, we’ll be seeking to create a unified brand across Lumia and Windows,” Tuula Rytilä, Nokia’s marketing chief, said in the blog post.

While seeing the “Nokia” name vanish may sadden those with fond memories of playing “Snake” on their Nokia 3310, the move makes a lot of sense for Microsoft. The smartphone and operating system will no longer be separate entities, which will allow Microsoft to take a more unified approach, like Apple does. In other words, you will no longer have to think about a “Nokia Lumia 1020 running Windows Phone 8”; you can simply think about your Microsoft Lumia (if Microsoft keeps the Lumia name, that is).

Nokia fans will be happy to know that the same teams will continue to design phones for Microsoft.

“It’s important to point out that new phones produced under Microsoft’s ownership will effectively be from the same stable as recent Nokia smartphones,” Rytilä said. “Our design and manufacture teams will join Microsoft. Stefan Pannenbecker has been the head of Nokia’s hardware design for some time, and he continues as we move into the next wave of design.”

The Asha brand will continue to be an entry-level smartphone while the Lumia will be the flagship device. Microsoft is reportedly bringing features like SkyDrive, Office and Xbox to the smartphones.

Rytilä said one of the key aspects of the purchase was the Nokia research-and-development sites in Finland. This should help Microsoft control costs and manage projects, and ensure that Nokia engineers won’t be forced to move.