As part of the recently announced alliance with Nokia, Microsoft is expected to fund up to US$1 billion of Nokia's marketing and development costs as it migrates to the Windows Phone OS.
However, the expected volume of Nokia sales will more than cancel out that upfront contribution.
Although Nokia will pay Microsoft a fee for each copy of Windows used in its phones, that cost will be offset by the reduction in its own in-house OS development. According to Bloomberg, which cited people close to the matter, the deal runs for more than five years they added.
Microsoft spokeswoman Melissa Havel declined to comment on the specifics of the agreement. Laurie Armstrong, a spokeswoman for Nokia, said the final contract hasn't been signed and the company will share further details when they are complete.
Microsoft's current weakness in the smartphone market was also apparently a benefit to the company, as Nokia felt it could use the OS to differentiate itself from the rest of the handset manufacturers who are increasingly delivering "me too" Android smartphones.
Handset manufactures have long feared being reduced to mere "beige box" suppliers as happened to the bulk of the desktop computer industry.
Although Nokia will pay Microsoft a fee for each copy of Windows used in its phones, that cost will be offset by the reduction in its own in-house OS development. According to Bloomberg, which cited people close to the matter, the deal runs for more than five years they added.
Microsoft spokeswoman Melissa Havel declined to comment on the specifics of the agreement. Laurie Armstrong, a spokeswoman for Nokia, said the final contract hasn't been signed and the company will share further details when they are complete.
Microsoft's current weakness in the smartphone market was also apparently a benefit to the company, as Nokia felt it could use the OS to differentiate itself from the rest of the handset manufacturers who are increasingly delivering "me too" Android smartphones.
Handset manufactures have long feared being reduced to mere "beige box" suppliers as happened to the bulk of the desktop computer industry.
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