Microsoft Paid Nokia Quarter of a Billion Dollars to Adopt WP7
That's a lot of dough.
When Nokia and Microsoft last year revealed a strategic partnership that would see the former use Windows Phone 7 as its primary smartphone OS, it was obvious what Nokia stood to gain from the deal. The Finnish company, once a king in the cell phone industry, was struggling in the smartphone space. The company needed a smartphone OS that already had an established user base and the support and apps necessary for growth. However, this wasn't a one-sided deal. Though Nokia has been less than successful in the smartphone market, the company has a lot of brand loyalty, and the partnership offered Microsoft the chance to reach millions more customers. As it turns out, Microsoft paid rather a lot for this privilege.
Though both parties have remained quiet about the financial details of their agreement for the better part of a year, information was revealed by Nokia yesterday during a quarterly earnings call. According to Nokia's Q4 results, which were released this week, Microsoft paid Nokia $250 million to use Windows Phone 7. Described by Nokia as a "platform support payment," this isn't a one time thing. According to SlashGear's Chris Davies, who was first to pick up on the figure, there will be more payments made by Microsoft. The eventual figure is thought to be more than one billion dollars.
"Our broad strategic agreement with Microsoft includes platform support payments from Microsoft to us as well as software royalty payments from us to Microsoft," Nokia said in its results. "We have a competitive software royalty structure, which includes minimum software royalty commitments."
So far we know next to nothing about what Nokia is paying Microsoft, but Nokia did say that over the life of the agreement "both the platform support payments and minimum software royalty commitments are expected to measure in the billions of US dollars.
Nokia also confirmed yesterday that it has sold more than a million Lumia handsets, as predicted by analysts earlier this week.
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Nokia sure they'll have a short place for you too.
this money came from all the patent royalty fees microsoft got. thank android, ms.
$250 million is not a lot to be paid to destroy your company. Nokia is destroying itself.
The media was sucked into the sales spin of a million Windows Phones sold. You'll find that these were not sold to consumers. They were sold to wholesalers. Shuffled from one warehouse to another to make it look like the Windows Phones were sold when they weren't. It's called cooking the books.
Not really sure if this is really news or not.
It was already reported in March of last year that Microsoft would be paying Nokia north of $1B to adopt their Windows Phone OS.
It sounds like this is just a payment on the $1B+ commitment to me...
No smart phones in my home. sounds like wasted money.
Despite the naysayers, I think Nokia will bring itself back to its former glory. Don't understand why everyone hates Windows Mobile. It's actually really, really good. Where Nokia was lagging was in its software/OS. With MS to focus on that aspect, Nokia can focus on doing what it does best: make phones.
Excellent deal for both parties. I can even see the two companies merging down the road or at least strengthening their alliance even further. Apple is ultra competitive right now. With Nokia and MS together, it'll keep the other honest.
Now it's starting to make sense. I still think it was a bad deal, though, since I can't see Nokia as competitive while running WP7. They should've gone Android.
No smart phones in my home. sounds like wasted money.
Don't see why Smartphones are a waste of money. Maybe you don't need it right now, but down the road it will become a necessity in life just like the computer. A smartphone is essentially a pocket computer.
The correct tool for the required job.
No smart phones in my home. sounds like wasted money.
I don't have a waffle maker in my home, but that doesn't mean that all companies who manifacture waffle makers are just wasting thier money and resoarces, there is a market for them.
After several Nokia's I wouldn't buy any with Windows on them!!!
No smart phones in my home. sounds like wasted money.
AKA being poor
Shelling out money to OEM & ODM customers worked for intel for years, and still does today ! If you can't beat Apple or Google, then bribe, I mean subsidize someone to use your crappy WP7 product !!
I don't have a waffle maker in my home, but that doesn't mean that all companies who manifacture waffle makers are just wasting thier money and resoarces, there is a market for them.
I have one, you can borrow it if you would like.
Its no different when Microsoft bailed out Apple from going bankrupt. MS gave Apple money in exchange they use Office on their Mac, and Apple gave MS non voting stock. Nokia was going no where comes MS with a cash injection, in exchange Nokia uses MS OS, its a win win for both MS and Nokia.
Shelling out money to OEM & ODM customers worked for intel for years, and still does today ! If you can't beat Apple or Google, then bribe, I mean subsidize someone to use your crappy WP7 product !!
Oh you mean just like when Microsoft bailed out Crappy Apple (using your term of crap) from bankruptcy in exchange they use Office on their Mac's, and Apple gives MS non voting stocks.
No smart phones in my home. sounds like wasted money.
yea tell that to every business in the world who wants there workers to have access to e-mail 24/7
FAIL
$250 million is not a lot to be paid to destroy your company. Nokia is destroying itself.The media was sucked into the sales spin of a million Windows Phones sold. You'll find that these were not sold to consumers. They were sold to wholesalers. Shuffled from one warehouse to another to make it look like the Windows Phones were sold when they weren't. It's called cooking the books.
Tin.
Foil.
Hat.
No smart phones in my home. sounds like wasted money.
Amish, per chance?
Shelling out money to OEM & ODM customers worked for intel for years, and still does today ! If you can't beat Apple or Google, then bribe, I mean subsidize someone to use your crappy WP7 product !!
Windows 7 , is actually pretty freaking good, and windows 8 will put an end to the toy OS's that we call android and iOS hardware has noww aught up soyou can have truly productive mobile software and windows owns the productivity world. Remember 1984. Apples closed eco-system will do them in again.
No smart phones in my home. sounds like wasted money.
No smarts in my home. sounds like wasted space.
Nokia did not ask for enough money.
Hey Microsoft, I'll happily adopt WP7 for say $100k. Check or cash is fine.
No smart phones in my home. sounds like wasted money.
visiting tom's to leave a post like that , sounds like wasted time...
wait... nokia actually PAID for that shit?!?!????
really. Elop is a tard.
this explaines why nokia dropped meego like a bad habit. whats better then a good free and open sourced operating system? an ok but not great operating system that someone is paying you a $250,000,000.00 to use. thats a crap ton of zeros, and a heck of a reason.
So MS spent 250 million in order to sell 1 million units so far?
Thank goodness these losers don't have a monopoly on anything but PCs.
So MS spent 250 million in order to sell 1 million units so far?Thank goodness these losers don't have a monopoly on anything but PCs.
No they paid 250 million to have a well known and respected phone hardware maker to adopt their OS and have it become more well known overtime. Corporations don't work for the quick short term, they tend to think down the line and see things like this as investments.
Microsoft spent $250 million to stop Nokia from going chapter 11, which is exactly where they were heading with their own software and no brand differentiation if they went down the Android route like all the other millions of samey-samey HTC handsets
...
Now they are recognised, people are aware and they are selling, Nokia should be paying Microsoft not the other way round
No they paid 250 million to have a well known and respected phone hardware maker to adopt their OS and have it become more well known overtime. Corporations don't work for the quick short term, they tend to think down the line and see things like this as investments.
well its a good thing that it is not exclusive to nokia phones because if it was it would still be non existent
Things are much better in the phone market. 3 big OS, Android, Windows & macOS. That will make things a lot better.
That makes MS OS cheaper than free. Well, MS lost loads of money to grow the Xbox market, and it worked despite Sony's evident superiority at the time. So I suspect they will get some size of the market in the future.