Sealing a deal they announced in February, Microsoft and Nokia have finalized their mobile partnership ahead of schedule, the companies said this morning.
If the arrangement works as the companies hope, it promises to be a pivotal deal for Microsoft — with researchers predicting that Nokia will help boost Microsoft’s Windows Phone into the No. 2 position in worldwide market share, ahead of the iPhone and BlackBerry, in a matter of four years.
But that’s not an insignificant “if.” As evidenced most recently by Yahoo’s struggles with Microsoft adCenter, the key with these giant corporate partnerships isn’t so much the agreement as it is the execution. As evidenced by the surge in HTC’s business, Google’s Android operating system stands to provide formidable competition for the Microsoft-Nokia partnership.
Nokia and Microsoft say they have made “significant progress” on the first Nokia devices running Windows Phone, with the goal of having them in the market in large volumes next year.
With the announcement came a series of additional details about the partnership. Here’s the rundown provided by the companies as part of the news release this morning.
Nokia to deliver mapping, navigation, and certain location-based services to the Windows Phone ecosystem. Nokia will build innovation on top of the Windows Phone platform in areas such as imaging, while contributing expertise on hardware design and language support, and helping to drive the development of the Windows Phone platform. Microsoft will provide Bing search services across the Nokia device portfolio as well as contributing strength in productivity, advertising, gaming, social media and a variety of other services. The combination of navigation with advertising and search will enable better monetization of Nokia’s navigation assets and completely new forms of advertising revenue.
Joint developer outreach and application sourcing, to support the creation of new local and global applications, including making Windows Phone developer registration free for all Nokia developers.
Opening a new Nokia-branded global application store that leverages the Windows Marketplace infrastructure. Developers will be able to publish and distribute applications through a single developer portal to hundreds of millions of consumers that use Windows Phone, Symbian and Series 40 devices.
Contribution of Nokia’s expertise in operator billing to ensure participants in the Windows Phone ecosystem can take advantage of Nokia’s billing agreements with 112 operators in 36 markets.
Microsoft will receive a running royalty from Nokia for the Windows Phone platform, starting when the first Nokia products incorporating Windows Phone ship. The royalty payments are competitive and reflect the large volumes that Nokia expects to ship, as well as a variety of other considerations related to engineering work to which both companies are committed. Microsoft delivering the Windows Phone platform to Nokia will enable Nokia to significantly reduce operating expenses.
In recognition of the unique nature of Nokia’s agreement with Microsoft and the contributions that Nokia is providing, Nokia will receive payments measured in the billions of dollars.
An agreement that recognizes the value of intellectual property and puts in place mechanisms for exchanging rights to intellectual property. Nokia will receive substantial payments under the agreement.