Two years after hitching its fate to Microsoft's Windows Phone software, Nokia collapsed into the arms of the U.S. software giant on Tuesday, agreeing to sell its main handset business for 5.44 billion euros ($7.2 billion).
Nokia, once the world's dominant handset maker, has failed to close a yawning lead opened up by Apple and Samsung in the highly competitive market for smartphones and will now concentrate on its networking equipment unit, navigation business and technology patents.
Nokia's Canadian boss Stephen Elop, who ran Microsoft's business software division before jumping to Nokia in 2010, will return to the U.S. firm as head of its mobile devices business - a Trojan horse, according to disgruntled Finnish media.
He is being discussed as a possible replacement for Microsoft's retiring CEO Steve Ballmer, who is trying to remake the U.S. firm into a gadget and services company like Apple before he departs, though it has fallen short so far in its attempts to compete in mobile devices.
"It's very clear to me that rationally this is the right step going forward," Elop told reporters, though he added he also felt "a great deal of sadness" over the outcome.
"I feel sadness because inevitably we are changing Nokia and what it stands for," he said.
In three years under Elop, Nokia saw its market share collapse and its share price shrivel.
In 2011, after writing a memo that said Nokia lacked the in-house technology and needed to jump off a "burning platform", Elop made the controversial decision to use Microsoft's Windows Phone for smartphones, rather than Nokia's own software or Google's ubiquitous Android operating system.
Nokia, which had 40 percent of the handset market in 2007, now has just 15 percent, and only 3 percent in smartphones.
Shares in Nokia surged around 35 percent to 4.01 euros by late Tuesday. While up from their decade-low of 1.33 euros hit last year, they are still only a fraction of their 2000 peak of 65 euros.
After today's gains the whole company is worth about 15 billion euros, a far cry from its glory days when it reached over 200 billion euros.
Tuesday's deal includes an agreement