Tech giant Microsoft has bought up the mobile phone hardware division of Finnish firm Nokia for $8bn, signaling a more aggressive move by the firm into the mobile space.

Nokia has been on a downward trajectory since the dawn of the smartphone, failing to keep pace with companies like Apple and Samsung in the race to innovate in the emerging market.

Its last handsets have all featured the Windows 8 operating system which has yet to catch on with Apple’s iOS and Google’s Android the dominant forces in the market.

Under the terms of the deal, expected to be completed in the first quarter of 2014, Nokia’s CEO Stephen Elop will join Microsoft after it has completed, with the Canadian who moved to the company in 2010 from Microsoft a favourite to succeed CEO Steve Ballmer when he retires next year.

Ballmer said in a statement: “It’s a bold step into the future – a win-win for employees, shareholders and consumers of both companies. Bringing these great teams together will accelerate Microsoft's share and profits in phones, and strengthen the overall opportunities for both Microsoft and our partners across our entire family of devices and services."

 "In addition to their innovation and strength in phones at all price points, Nokia brings proven capability and talent in critical areas such as hardware design and engineering, supply chain and manufacturing management, and hardware sales, marketing and distribution."

The move echoes Google’s acquisition of Motorola in 2011, and follows Microsoft’s $8.5bn capture of Skype in the same year.

Risto Siilasmaa, Nokia’s new interim CEO said: "After a thorough assessment of how to maximize shareholder value, including consideration of a variety of alternatives, we believe this transaction is the best path forward for Nokia and its shareholders.

“Additionally, the deal offers future opportunities for many Nokia employees as part of a company with the strategy, financial resources and determination to succeed in the mobile space.”