Nokia will continue to operate as an independent company, consisting primarily of three business units: Nokia Siemens Networks, the HERE location services and mapping (including Navteq) unit, and its research center. Microsoft will acquire the phone business and a ten year license to Nokia's research portfolio.
There's a lot to say about this acquisition, and lots of articles are saying it. I particularly recommend these articles: this bottom-line summary, this perspective from Microsoft, this financial analysis, and this analysis of some of the details.
Taking a longer term view, however, I have some interesting observations. First, while everyone is looking at Microsoft's interest in Nokia's smartphone business, they must have a plan for the feature phone business as well. Second, Nokia released a hint that they might get back into the device business themselves, starting in 2016.
I've written more about these observations, with my speculation for what both companies have in mind, in this article on SeekingAlpha. Here's a taste:
Speculation: Microsoft is getting ready to release Windows Phone for feature phones...See the article for the details.... http://seekingalpha.com/article/1669502-long-term-observations-nobodys-discussing-on-the-microsoft-nokia-deal
Speculation: Nokia has some radical new technology in their research labs with the potential to revolutionize mobile devices, but it won't be ready until 2016, and it will require a lot of cash to complete the research....