Bloomberg News, citing two unnamed sources, reports that Microsoft has agreed to pay Nokia more than $1 billion to “promote and develop” Windows Phone devices under the agreement between the companies. Bloomberg says the agreement for the payment was “part of a campaign by Microsoft to keep Nokia from choosing Google’s Android operating system.”
To put the figure in perspective, it amounts to 5 percent of Microsoft’s $18.7 billion in profits last fiscal year. The Redmond company spent $13.2 billion on sales and marketing in fiscal 2010, and $8.7 billion on research and development.
Nokia, the world’s largest smartphone vendor, agreed to make Windows Phone its “principal smartphone strategy” under the partnership announced last month. Microsoft, which had been early entrant in the smartphone market, is trying to regain its momentum with the new Windows Phone operating system.