LONDON – Software giant Microsoft will pay mobile phone company Nokia more than $1 billion to promote and develop handsets that run the Windows operating system, according to a Bloomberg report that cites two un-named sources.
Intel CEO Paul Otellini had hinted that Nokia had been paid to jump ship when he recently discussed the departure of Nokia from an alliance with Intel called MeeGo. MeeGo is a Linux-based open source mobile operating system targeted at a range of mobile devices.
Otellini said at the time that Nokia's CEO Stephen Elop had concluded that Nokia could not "afford" to stay with the MeeGo project after receiving offers to switch from both Microsoft and Google.
Under the terms of deal between Microsoft and Nokia that is due to run for more than five years, Nokia will pay Microsoft a royalty on each copy of Windows used in its phones. But the benefit will come in terms of the saving on software R&D, Bloomberg said. The final contract has yet to be signed, the report added referencing one of its un-named sources.
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