So Microsoft has done what everyone had been expecting for nearly two years and bought Nokia’s devices and services business unit, along with the right to license patents and the Finnish company’s mapping services. The deal, which cost Microsoft nearly $7.2 billion, also meant that Stephen Elop had to step down as CEO of Nokia and will be moving to Microsoft in another high-level capacity.

It is said that Elop is being prepped to take over from current Microsoft CEO Steve Ballmer, who will retire by mid 2014. Ballmer for his part told The Verge that a deal had been reached before he announced his plans to retire and that talks had begun as early as January before the Mobile World Congress. But he refused to say whether Elop will be the next CEO.

The colourful Asha 501

The Nokia Asha 501 is inspired by the Lumia range

While there is no clarity on Elop’s future role in Microsoft, one other thing becomes very clear from this development. Nokia as a smartphone brand is all but dead. Along with 8,500 design patents, Microsoft is buying the Lumia and Asha brands and also a 10-year license to use the  Nokia brand on feature phones (likely running S40), such as the Nokia 515, which was announced last week. In essence, Microsoft considers Asha to be a smartphone or smartphone-like platform, which can play second-fiddle to the bigger Windows Phone OS. In Microsoft’s world, Asha could serve as a gateway platform for Windows Phone.

The logic isn’t all misplaced. The latest smartphone sales survey from Kantar reveals that Windows Phone market share is growing in the top markets of the world. This surge is largely because of customers migrating from ‘dumbphones’ or feature phones such as Nokia’s very own S40 phones or Asha series, which accounts for a huge chunk in this category. 42 percent of Windows Phone sales, the Kantar survey says, came from customers moving from feature phones. “Featurephone owners present a huge opportunity, representing more than half of all mobile users globally and this will be the new battleground over the next year. With the iPhone 4 and lower end or older Samsung Galaxy models selling well among first-time smartphone owners, there is plenty of competition for these customers. The brands that win in this segment will be those that understand and address the needs of consumers in terms of price, content, and quality,” the survey, which was released the same day as Microsoft’s announcement, said.

Now we know why Nokia chose Windows Phone

Nokia is the biggest backer of Windows Phone

Another possibility is that Microsoft will co-opt the Asha brand into the existing Lumia brand and have a go at the smartphone market with one concerted effort. This would eliminate possible mixed message problems, when it comes to marketing the two ranges, not to mention, allow a more streamlined production and distribution effort.

Earlier this year, when Nokia revamped the Asha platform with the Asha 501, the company brought the industrial design of the phone and, to some extent, the UI in line with the Lumia phones. At the time, it was seen as a move by Nokia to align its phone brands, but it could very well have been a precursor to what Microsoft has planned for the Asha brand, since we now know Nokia-Microsoft talks have been going on since January. By introducing core Microsoft services such as Bing search and SkyDrive to Asha phones in a limited capacity, the company could be giving those users a taste of what Windows Phone has in store.

We won’t know for sure what Microsoft plans to do with the Asha brand till the deal is finalised in early 2014, but at the moment, it looks like the Redmond company wants Asha to be a trampoline for long-term Windows Phone success.