Nokia-Microsoft deal allegedly worth US $1 billion

Microsoft will pay Nokia more than $1 billion (£670m) to promote and develop Windows-based handsets as part of their smartphone software agreement. Nokia in return will pay Microsoft a fee for each copy of the Windows Phone operating systems, for a period of more than five years.

Nokia is forced to move on to a new platform as its own expensive smartphone OS, MeeGo, is failing to gain traction. Nokia has opted for Microsoft’s Windows Phone software as it is newer than Android and has a smaller number of handsets for sale, giving Nokia a better chance to stand out. As part of the deal, Microsoft will use Nokia’s Navteq mapping products for functions such as geolocation services and selling local advertising and coupons tied to a user’s position.The partnership could benefit both sides financially while helping stave off a smartphone threat from Apple iPhone and Google’s Android OS. Nokia’s share price has fallen by 26 % since the Microsoft deal was announced on 11 February, reflecting doubts about the move to adopt Microsoft’s OS. Still there is no statement on when the agreement will be signed, or when we will start seeing the Nokia-Windows smartphones.