Microsoft Partnership With Nokia Cell Phones: Companies Plan to Dominate Mobile Phone Market

After roughly seven months since Microsoft's announcement that it was going to acquire Nokia's device unit, the two companies will now officially work together to regain dominance in the cell phone market.

The acquisition, which cost Microsoft more than $7.5 billion, will be in the hands of Microsoft's new chief executive Satya Nadella who will oversee the development of the company's "mobile first and cloud first" approach, Bloomberg reported.

Microsoft will become the second-largest cell phone manufacturer with its absorption of Nokia's mobile assets, according to IDC. Samsung and Apple are the current leaders in the cell phone game.

Nokia's mobile devices will be used as the hardware in Nadella's new strategy, which aims at keeping consumers interested in Microsoft in the face of the declining market for personal computers.

Stephen Elop, executive vice president of Microsoft's devices group and former CEO of Nokia, said in a statement that the new venture would help people without personal computers still stay connected with smartphones.

"The vast majority of people do not have, (nor) will they ever have, a personal computer," Elop said. "There are literally billions of people who can be exposed to Microsoft for the very first time."

Microsoft's Windows operating system for mobile devices is expected to grow substantially during the following four years, but because of it's low starting point, it is only estimated to dominate 7 percent of the total market by 2018, according to Bloomberg.

Microsoft also announced recently that, in an attempt get more cell phone devices running on Windows, the company will stop charging licensing fees to manufacturers specifically on devices that are smaller than 9 inches. This business strategy is similar to Google's approach where the Silicon Valley based company offers free Android operating systems to all cell phone manufacturers.

Nadella told analysts Thursday that he wants Microsoft to be far-reaching and dominant in the cell phone market.

"We have monetization wrinkles on the back end," he said, adding, "because in a world of ubiquitous computing, we want Windows to be ubiquitous."