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Bloomberg: MSFT to Pay $1bn in WP7/Nokia Deal

When Microsoft and Nokia announced a partnership that would see Windows Phone 7 become Nokia's primary smartphone OS, there was a lot of speculation as to whether or not Microsoft had paid for the privilege. Nokia's official line is that the contract has yet to be signed and so they cannot share details until the all the ts have been crossed.

However, today a report from Bloomberg suggests that Redmond did indeed fork out cash for the deal. Bloomberg cites two unnamed individuals with knowledge of the terms in reporting that the agreement will see Microsoft pay Nokia more than $1 billion to promote and develop Windows-based handsets.

An expensive deal for Redmond, for sure, but it's not all one directional. The sources also said that Nokia would pay Microsoft on a per-licence basis and one source said that Microsoft is also gaining the right to use Nokia's patent portfolio.

Additionally, Microsoft will make use of Nokia's Navteq mapping software for a number of different services, such as geolocation and selling ads and coupons to users based on their location. This is a prime example of how the deal will mutually benefit both parties.

Nokia announced its plans to partner with Microsoft in early February, roughly one week after its newly-appointed CEO Stephen Elop sent out a 'burning platform' email promising big changes. The news came as a shock to those who had been following the Espoo, Finland-based company's position on the smartphone market. The company had long criticized competitor's use of Android, and claimed that by using the same OS as everyone else, one ran the risk of diluting their brand and becoming indistinguishable from competition. To turn around and announce that Nokia's primary OS would be one widely available for others to use was quite an about face.

For more on the announcement check out our previous coverage:

1. Nokia and Microsoft Announce Phone Partnership

2. An Open Letter from the CEOs of MSFT and Nokia

Read Bloomberg’s full report on the deal between Nokia and Microsoft here.