Microsoft paying Nokia 1 billion for 5 years plus deal

Even though Nokia’s Stephen Elop declared during MWC that Microsoft wasn’t paying Nokia upfront to use Windows Phone 7 as its smartphone OS, two of Bloomberg sources are indicating that the Redmond software giant is actually going to pay the Finnish mobile juggernaut approximately $1 Billion for the 5 years + deal. Part of this money will be used to promote the future products, R&D and also license Nokia’s Ovi Maps and Navteq assets to integrate them in Bing Maps. Nokia will also obviously pay for every Windows Phone 7 license used on the upcoming products so Microsoft is going to recoup part of the Billion once the devices start to come out on the market.

Microsoft Corp. will pay Nokia Oyj more than $1 billion to promote and develop Windows-based handsets as part of their smartphone software agreement, according to two people with knowledge of the terms.

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 one of the people, who declined to be identified because the final contract hasn’t yet been signed. The agreement runs for more than five years, the people said.

Nothing is ever done for free so this news shouldn’t come as a surprise to anybody who follows the industry. Now let’s hope that this is going to be money well spent by Microsoft. This is, in my opinion, better than the hundred of millions spent on the “not so effective” Windows Phone 7 marketing campaign that started last October.

source: Bloomberg

  • http://twitter.com/TroyGates TroyGates

    Is the Nav software worth that alone? I’ve read its the best on the market.

  • http://www.mobiletechworld.com MobileTechWorld

    Yes Ovi Maps is IMO the only mapping service that can effectively compete with Google Maps.

  • http://twitter.com/keshwar gyre_consulting

    I hope Nokia can produce a device that is sexier than my iphone.

  • Anonymous

    I know what my next phone is going to be.

  • http://pulse.yahoo.com/_C6IXDOTORQ4FGTPTDEPJQKKV7E TheBoholStandard

    This is one way for Nokia to redeem its lost market share in the mobile industry, as predicted by an analysis at http://www.newsbalita.com.