Tuesday, March 8, 2011
Posted by Nelson Ocampo in "Windows Phone News" @ 12:00 PM
"Microsoft (NSDQ:MSFT - News) won a huge new partnership with Nokia (NYSE:NOK - News) that could light a fire under its mobile division, but it will come at a price: over $1 billion. The five-year agreement between the two companies—which somehow still hasn’t been signed—will see over $1 billion transferred from Microsoft to Nokia to encourage the production of Windows Phone 7 handsets, although it’s not all one-sided: Nokia will pay a licensing fee per handset to Microsoft that could eventually make the deal profitable for Microsoft, according to a report from Bloomberg. Still, the payments will start before the first Nokia Windows Phone 7 handsets arrive, which means that they’ll have to sell in decent volume for Microsoft to eventually see a payout."
While this may seem like a lot of money, it is equivalent to only 5 percent of the profits Microsoft made last year.
So, what is Microsoft really buying for the $1 billion? It isn't only Nokia's love, support, and marketing that they'll be getting, but also rights to Nokia's huge library of patents. Nokia has been in the handset game for a while, and they have quite a few innovations themselves. And now MS will have access to them without having to worry about possible lawsuits from Nokia. Something Apple wasn't as lucky with.
Check out the link for the full scoop.