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.
To yalanand, the deal is bad b/c Microsoft operating system in mobile applications is not efficient...this is not a problem in a PC environment as Intel supplies enormous processing power but is extremely important in a smart phone where resources are limited...Android was the right answer that Nokia could not get, maybe they should had used IBM Watson to reason that ;-)...Kris
Not sure why everyone is so pessimistic about the deal. I feel competition is always good. There will be people who will get bored of Android and will switch to windows phones. Can anyone please explain why this deal is so bad ?
This will be interesting. The big advantage that they could have (not sure if it still works) is the integration with Office. Noone else can do that as nicely as Microsoft. Since a jillion people still use offce, it'd be nice to have a decent way to synch with outlook.. Android and iPhone users have to settle for patch solutions for this...
Microsoft seems like a billionaire drunk with no idea of where he is going or how to get there. When he runs out of money he will lose his friends ending up destitute and lonely. Fortunately it will take a long time to go through all that money so their employees will have time to find another job.
The total worth of MS shares owned by Elop was ~3m$. Thats peanuts for these guys. The stock options given by Nokia to him will be atleast 10x that amount. And on top, he sold all his MS shares few weeks back after some idiots said similar things.
I talked to a friend at Nokia...the morale is very low, not a surprise...my prediction: this deal doesn't work, Nokia continues to loose market share, CEO gets fired in 2 years time...Nokia to start to re-invent itself in 2014 by going to its roots (original cell phone design not rubber boots ;-)...Kris
Great reply. Your thesis then looks to be that Win7 didn't have much of a chance in phones without winning Nokia... and you may be right. The argument that having Nokia as a healthy competitor is a good one - thought of it myself but wasn't going to hand it over to you in advance :) ...and having MS pay dollars to Nokia and do [some of] their work for them certainly should help their health.
If it gives Windows Phone 7 a decent share of the smartphone market -- real competition for iOS, Android and don't forget RIM -- then consumers will have more choices. Competition is always a good thing.
And if Nokia should be so lucky to sell SO many smartphones that MS gets back all of their $1B as royalties, then Nokia will have made a ton of money, acquired a significant share of the smartphone market, and will be 'back' as a healthy competitor -- which again would be good for consumers.
As for proprietary vs. open OS, consumers don't seem to care as much about this as engineers do :)