The Nokia deal thrusts Microsoft deeper into the hotly contested mobile phone market, despite some investors urging it to stick to its core strengths of business software and services.
Elop will return to Microsoft as its board ponders a successor to Ballmer, who will depart in the next 12 months.
Activist fund manager ValueAct Capital Management, which has been offered a board seat, is among those concerned with Ballmer’s leadership and his attempts to plough headlong into the lower-margin, highly competitive mobile devices arena.
Others applauded Ballmer’s aggressive gambit.
“Microsoft cannot walk away from smartphones, and the hope that other vendors will support Windows Phone is fading fast. So buying Nokia comes at the right time,” said Carolina Milanesi, an analyst at Gartner.
“In today’s market it is clear that a vertical integration is the way forward for a company to succeed. How else could Microsoft achieve this?”
As part of Microsoft, Elop will head an expanded Devices unit. Julie Larson-Green, who in July was promoted to head a new Devices and Studios business in Ballmer’s reorganization, will report to Elop when the deal is closed.