Microsoft Corp, which created the Windows operating system, has bought Nokia Oyj’s phone business and license patents for AU$7.91 billion.
Technology analysts are speculating that the move will create a third player to compete with Apple’s iPhone and Google’s Android smartphones.
It is also being speculated that the move could be a final nail in the coffin of smaller time manufacturer, BlackBerry.
Nokia, which last month opened a pop up space on George St in Sydney, has opened stores in sites like San Paulo but does not have a global retail footprint to rival Apple.
It shut down its biggest store in Shanghai, which it opened in 2007 to much fanfare, last April, and has also closed its Beijing flagship.
The company has been focusing more on third party resellers and online, with it unclear if the Microsoft deal will see Nokia refocus on retail.
Nokia was founded in 1865 and is now the world’s second largest mobile phone maker behind Samsung. Its handsets have already been operating on a Windows platform.
The news is just the latest in a string of acquisitions within the booming smartphone market, with Google buying Motorola a year ago.