Nokia continues trimming the fat: messaging biz goes to Synchronica

For a mere $25 million in cash, mobile messaging service provider Synchronica has conditionally agreed to acquire Nokia’s email and instant messaging services. This is a bargain deal, because it means Synchronica will acquire six million users across ten North American carriers, including giants AT&T, Verizon, T-Mobile and Sprint. Synchronica’s market will now extend to approximately 1.8 billion end-users worldwide.

The news comes a week after Nokia finalized a deal to outsource its Symbian OS to Accenture (this deal has been in the works for years). Nokia, a Finnish company, is the largest mobile phone manufacturer in the world but its market share is falling due to the growing smartphone market. The company abandoned Symbian as its primary mobile OS earlier this year and is now working on building flagship Windows Phone 7 devices.  Rumors continue that the troubled company’s phone business could be bought out by the likes of Microsoft or even of Samsung.

This is a giant acquisition for England-based Synchronica which has, until now, focused on messaging services in developing and emerging countries in Latin America, Africa, Russia, and Asia (it has more than 80 existing carrier contracts).

The technology acquired in today’s deal with Synchronica includes Nokia’s email, IM, and social networking gateway and client software, which Synchronica says it will continue the development and merge with its own Mobile Gateway infrastructure. Synchronica says its relationship with Nokia will be “long-term,” but doesn’t give any specific timeline.

Synchronica says it will provide the messaging software which Nokia will continue to pre-load on Nokia Series 40 phones. MocoNews.net reports Synchronica will be paid $18.2 million over in the next 18 months for Nokia to continue to preload the services into its own devices.

Synchronica isn’t just getting technology. Approximately 250 employees, externals, and contractors are planned to transfer from Nokia. Synchronica also gets 10 patents as part of the deal (eight remain with Nokia, but Synchronica will have a royalty free license to them).

The all-cash deal of $25 million also includes 18.3 million warrants to Nokia, to be exercised in three years to potentially buy shares in Synchronica.

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