Nokia to get more than it gives to Microsoft in 2013
Today Nokia released its financial Form 20-F to the United States Securities and Exchange Commission which outlines its long-term business targets and outlines their relationship with Microsoft. Amongst the dense financial lingo and obvious goals to grow their sales ahead of the market, while keeping costs down, came an interesting tidbit. In 2013, Nokia stands to receive more money from its partner Microsoft than it will pay out in royalties to them.
The relationship between the two giants is one of reciprocal payments and goes back to 2011. Like any manufacturer of Windows phones, Nokia pays a licensing fee to Microsoft to use their operating system. But unlike other companies, Nokia receives massive payments from Microsoft as part of their partnership to use certain Nokia functionality, such as mapping technology, and to help Nokia with advertising, their transition from Symbian and marketing.
The deal, which started in 2011, runs for five years. It has not always been, nor will it always be the case, but it appears that Nokia will make out ahead of its partner in the deal in 2013. Nokia states in the filing that the money it sends over to Microsoft in royalties will exceed what they get by about half a billion Euros by the end of the deal. But in a year where Lumia sales are strong and Windows Phone is making a big push, it could be useful to have that extra cash coming in.
The filing can be found in its entirety here.