Andre Yoskowitz
8 Mar 2011 14:07
Bloomberg is reporting that Microsoft will end up paying Nokia over $1 billion for the recent Windows Phone 7 deal, through development and promotional costs.
"Nokia will pay Microsoft a fee for each copy of Windows used in its phones, costs that will be offset as Nokia curtails its own budget for software research and development," says one of the sources even though the full agreement has not been signed yet.
The deal will last for "over 5 years."
Most analysts have called the deal a winner for Microsoft, who will gain a huge platform boost for a relatively insignificant amount of money. Nokia, on the other hand, has seen their shares fall 25 percent since the announcement, as investors doubt the move will help fix Nokia's faltering market share.
Additionally, margins at Nokia have fallen to just 5 percent in 2010 from 19 percent in 2001.