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Microsoft reportedly to pay over one billion for Nokia’s WP7 allegiance

Bloomberg is reporting that Microsoft is to pay in excess of $1 billion to Nokia to promote and develop WP7 mobile phones.

“Two people with knowledge on the terms” disclosed the information to Bloomberg, which also explains that Nokia is to pay for each copy of Windows used on a handset. The final contract on what will be more than a five year agreement is still however yet to be signed.

Doubts as to what exact success Nokia can bring to Microsoft’s OS continue with the companies shares dropping 26 percent when the partnership was announced.

Tech Crunch has said that Microsoft was rumoured to have outbid Google in acquiring the partnership. What may appear like a relatively large amount of money ($1 billion) is actually small considering the amount of mobile market that Microsoft has acquired with Nokia.

“Think about it. A billion dollars for a five-year partnership with Nokia? I think Microsoft is taking Nokia to school here.” said Tech Crunch’s Devin Coldewey.

He has a very good point, Microsoft has managed to divert R&D costs to Nokia, a company who is to pay them a fee for every copy of their software used. Appears to be a bit of a win win situation for MS. Better still, Microsoft will sell more WP7 handsets regardless of whether or not Nokia succeeds. All this contributing to expanding the WP7 brand presence across the market.

What we are yet to see however is any of Nokia’s WP7 hardware, which could be a potential turning point for the manufacturer. For several years Nokia has been in desperate need of a killer piece of hardware in order to reassert themselves in the mobile world. If they can manage that and reputation is restored then who knows what the company has in store for the future.

Problem is that things are just as likely to go very, very, wrong; the partnership could result in some skewed amalgamation of everything bad about Nokia’s handset design and Microsoft’s OS. Or they could strike lucky, creating something brilliant out of what is currently a pair of relatively stale and struggling products.
 

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