Though neither Nokia nor CEO Stephen Elop ever said there was an exchange of billions of dollars as a part of the company's tie-up with Microsoft for the Windows Phone platform, Bloomberg is sourcing "two people with knowledge of the terms" in saying that something in excess of $1 billion is flowing from Redmond to Espoo. Though the deal isn't yet finalized -- Elop said as much back at MWC -- it'd apparently call for Microsoft to pay out at least some of the cash upfront with Nokia sending cash in the other direction for device licenses. Interestingly, the deal is said to give Microsoft access to parts of Nokia's expansive patent portfolio -- and they'll have it for quite some time, too: the contract's apparently going to be good for "more than five years." That's more than most marriages, it seems (and roughly as expensive). Tuesday, March 8, 2011
Bloomberg: Microsoft to pay Nokia 'more than $1 billion' to make Windows Phones
Though neither Nokia nor CEO Stephen Elop ever said there was an exchange of billions of dollars as a part of the company's tie-up with Microsoft for the Windows Phone platform, Bloomberg is sourcing "two people with knowledge of the terms" in saying that something in excess of $1 billion is flowing from Redmond to Espoo. Though the deal isn't yet finalized -- Elop said as much back at MWC -- it'd apparently call for Microsoft to pay out at least some of the cash upfront with Nokia sending cash in the other direction for device licenses. Interestingly, the deal is said to give Microsoft access to parts of Nokia's expansive patent portfolio -- and they'll have it for quite some time, too: the contract's apparently going to be good for "more than five years." That's more than most marriages, it seems (and roughly as expensive). 
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This stinks of MS-friendly CEO setting up Nokia for a fall. When this non-exclusive exclusivity agreement ends, Microsoft will have Nokia by the balls.
ReplyDeleteIf Nokia sells 100 million win phones each year for five years and pays just $5 per phone, they will pay out 2.5 billion just for licenses. If they invested that last 1.5 billion (2.5 - 1 = 1.5) in paying developers to create all the simple applications that everyone seems to think a phone needs, they wouldn't have the "new app store" problem (1.5 billion could hire 1500 developers @ $200,000 for 5 years or 2500 for 3 years). Further, on these 1st party apps, they would have 100% return vs 30% for 3rd party and vs the nothing they would make when MS owns the store.
Here's another interesting solution; pay app developers less than regular developers, but offer them 30% of whatever the app makes (still making 70%, but the main goal here is just to encourage the development of an ecosystem). This would encourage rapid development and good development (assuming good apps sell best). If it didn't, just fire the lazy developers and get new ones. An app store with thousands of small apps and a few really great ones could appear in just 3-4 months. At the end of 1 year, all the most used apps could be designed in-house and make Nokia a fortune.
Also, freeze major back-end changes to Meego. Finish what is currently being worked on and get it to market. At a later date, the back-end structures can be changed with Qt acting as a buffer to ensure backward compatibility.
Well he used that figure as a matrix to provide us illustration. Btw, a 5 year term in smartphone industry is huge, so who knows whether they can sell 100M phones or less or more ?
ReplyDeleteBtw, 1M to be paid by MS to Nokia, I feel is not all about the deal. Perhaps, it can be one of the major part of the agreement.