Microsoft is thought to be paying out over £600 million to Finnish mobile manufacturing firm Nokia, as part of the deal which will result in a new range of smartphones based on its Windows Phone 7 platform.
A five year deal is on the table and in return for this initial investment, Nokia will pay Microsoft a fee for each handset running Windows Phone 7 which it manages to sell.
Some are speculating that it was the billion-dollar offer that meant Nokia opted for Windows Phone 7 rather than Google’s Android platform, as part of its search for a replacement for its flagship Symbian operating system.
Reports from Bloomberg argue that in actual fact, it was the relative uniqueness of Windows Phone 7 which attracted Nokia, as it saw the Android marketplace as somewhat saturated with rivals.
Microsoft is expected to make a profit in the long run as a result of the licensing deal, while Nokia is reducing its budget for research and development, in order to cover the costs, but the cash injection which is allegedly going to take place will certainly set the partnership off in the right direction. We can only hope that the first handsets to emerge have decent specs and receive positive reviews.