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Nokia will pay $650 million more to Microsoft for the remainder of their Windows Phone deal

Preston Gralla | March 8, 2013
A new Nokia filing reveals that Nokia will end up paying Microsoft at least $650 million more to Microsoft than Microsoft will have to pay to Nokia during the remainder of their Windows Phone agreement, even if Windows Phone bombs. That's just one more sign of what a good deal the pact has been for Microsoft.

In the filing Nokia is required to lay out all the risk factors it faces. As always, in these types of filings, this section can make for hair-raising reading. One of the more interesting dangers if the latest version of Windows, Windows 8, doesn't take off:

Microsoft has recently launched the Windows 8 operating system used to power personal computers and tablets, and the related Windows Phone 8 operating system is used in the latest Nokia smartphones. The success of Nokia's Windows Phone 8 smartphones will be negatively affected if the Windows 8 platform does not achieve or retain broad or timely market acceptance or is not preferred by ecosystem participants, mobile operators and consumers.

The filing shows once again that the Nokia deal was a very smart move for Microsoft. Without a major phone maker committed to Windows Phone, the smartphone OS would never have been able to succeed. Microsoft was able to do that without ultimately having to spend much money. Over the life of the agreement, Microsoft will ultimately pay not a great deal of money to Nokia. That's quite a deal, at least for Microsoft. It's not at all clear whether it was a smart move for Nokia.


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