Microsoft News

Microsoft 'betrayed' Finland, says Finnish finance minister of layoffs

Rumors

Microsoft's aiming for flagship Windows Phones, killing Nokia X but selling MixRadio

Apps

New Treasure Tag app update ditches the 'Nokia' brand

Microsoft News

Rumor claims 1,000 former Nokia employees in Finland could be laid off by Microsoft

Apps

New Nokia MixRadio update ditches the 'Nokia' brand

Windows Phones

Lumia 930 pre-orders begin in Norway Wednesday for July 10 launch

Windows Phones

Microsoft Store US site pulls pre-order listings for Nokia Lumia 635

Apps

Nokia Imaging SDK 1.2 released, Lumia SensorCore SDK out of private beta

Windows Phones

Nokia Lumia 635 for AT&T and T-Mobile available for pre-order at US Microsoft Store site

General News

Microsoft teases possible launch date of a green Lumia or successor to the X

General News

Microsoft partners with British designer to create wireless charging pants

Microsoft News

Beat Nokia by predicting world cup games in Sporting Mouth to win some awesome prizes

General News

Lumia 930 availability on Ireland's Meteor pushed back to mid-July

Microsoft News

Nokia brand names Lumia, ClearBlack, PureView, and others now belong to Microsoft

General News

Lumia 1320, 630 availability expand to Argos Ireland

General News

Nokia Ireland confirms Lumia 930 launch on July 3

Windows Phones

Nokia Lumia 635 going on sale in Singapore on Saturday

Apps

Nokia updates Network+ again

General News

Nokia buying Medio Systems to improve its HERE maps service

Windows Phone News

Nokia Lumia 930 confirmed to be coming soon to Ireland on Meteor

5

Microsoft to pay Nokia $1 billion in deal

We have witnessed the sheer depth of Microsoft’s budget when it comes to advertising and marketing campaigns, but who would have guessed they would be providing Nokia $1 billion for them to further promote and develop Windows Phone 7? The partnership between the two giants could prove to be what the platform needs to combat Google and Apple with competition.

“Nokia will pay Microsoft a fee for each copy of Windows used in its phones, costs that will be offset as Nokia curtails its own budget for software research and development,” said an unidentifiable life-form (due to the contract not being finalized as of yet), continuing on to state that “the agreement runs for more than five years,” which sounds like an interesting accommodation, should the contract be signed.

If successful, this agreement will allow Nokia and Microsoft to financially benefit from the newly formed partnership, which is perfect since shares in Nokia are being negatively affected by Earths gravity and WP7 (incl. WinMobile) was recently shown to have experienced a slight dip in market share.

Colin Gillis, an analyst at BGC Partners based in New York, recommends investing in Microsoft shares and explained that "This gives Microsoft scale and allows Nokia to rip out costs," and concludes with the observation that "Microsoft is getting the platform boost that comes from acquiring a Nokia for about a billion dollars."

Included as part of the deal, Microsoft will be using Nokia owned Navteq mapping products for geolocation services among other functions, as well as selling local advertising and coupons tied to a user's position. Both companies will be set to share revenue in the above and also search & advertising - I would hazard a guess with Bing and AdCentre. Peter Klein, Chief Financial officer at Microsoft, explained last week that “in success, it is a very mutually beneficial deal economically for both companies,”

A very promising update from the ‘Nokiasoft’ formation, but one must ask the question - what about the other manufacturers/vendors? When we originally covered the potential deal between Nokia and Microsoft, a good section of the conversation was covering the “special treatment” Nokia could receive from Microsoft. What are your thoughts on the upcoming deal, and do you think this will positively (or negatively) affect Windows Phone 7?

Source: Business Week

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Comments

There are 5 comments. Sign in to comment

cdook says:

I thought the Nokia CEO said a while back that there was no money exchange as part of this deal. A billion is a pretty hefty chunk of change. It's more proof that Microsoft is determined to see WP7 succeed.

Neofire says:

We are about to see some serious hardware come our way, and with that kinda dough a much better wp7 experience.......

proof2006 says:

@CNova not to mention all the patents held by Nokia, and access to ovi maps

GP07 says:

The money could be for just that, access to the patents and other licensing Nokia holds that MS needs/wants, specially in Europe.

DavidinCT says:

1 million or 1 billion, Who cares as long as we get kick **** phones...