Microsoft Pays Nokia $1B to use Windows in Phones

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Microsoft’s deal with Nokia to place Windows Phone 7 on future Nokia smartphones didn’t come cheap.

Microsoft is paying Nokia over $1 billion to promote and develop Windows phones, reported Bloomberg.

Microsoft pays Nokia over $1B to use windows in phonesOn the other hand, Nokia will pay Microsoft a fee for each copy of Windows used in a phone, under a 5 year agreement.

The deal is said to be good for both parties. Microsoft gets a big share of the smartphone market but Nokia gets to save on software R&D.

Nokia announced the deal with Microsoft last month triggering a media storm of speculation on why the cellphone leader chose Windows over Android.

In 2010, the Android OS accounted for 22.7% of the worldwide smartphone market, behind Symbian, Nokia’s present OS, which fell in share from 46.9 percent in 2009 to 37.6 percent. Microsoft declined to 4.2 percent and Blackberry dropped to 16.6 percent, while Apple’s iOS climbed to 15.7 percent, according to Gartner said Tom’s Hardware.

Source: Bloomberg via Businessweek

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