Nokia's Stephen Elop and Microsoft's Steve Ballmer. (Credit: Microsoft)

Nokia’s earnings report today sheds new light on its partnership with Microsoft — confirming that the company sold more than 1 million Windows Phones in the fourth quarter, and disclosing that Microsoft made its first quarterly “platform support payment” to Nokia, totaling $250 million.

The payment translates into 180 million euros, not a huge portion of Nokia’s 5.6 billion euros in cash and other liquid assets, but the mobile phone maker needs every bit of help it can get as it transitions to the Microsoft platform.

Nokia’s sales fell 21 percent to 10 billion euros in the fourth quarter, and its overall sales of smart phones and other high-end devices fell 31 percent to 19.6 million units in the quarter. Nokia’s net loss was more than 1 billion euros, or more than $1.4 billion.

In its earnings report, Nokia noted that it will also make software royalty payments to Microsoft. “Over the life of the agreement, both the platform support payments and the minimum software royalty commitments are expected to measure in the billions of US Dollars,” the company says.

Microsoft is counting heavily on the Nokia partnership to regain traction in the mobile phone market. Nokia launched two Windows Phones in Europe in the fall, and debuted its first Windows Phone in the U.S., the Lumia 710, on T-Mobile earlier this month. The flagship Lumia 900 is slated to debut on AT&T’s LTE network, reportedly starting in March for $99.99.

 

 

Comments

  • Guest

    Grim.

  • http://pulse.yahoo.com/_JCNJCVXEXMSBNASNUXQOK23AEY DabbleBabble

    So M$ is paying Nokia in order for Nokia to pay M$?
    Sounds like a statistical PR stunt.

  • Anonymous

    a) they’re probably subsidizing that $250M from all the patent extortion, er, royalties they’re getting from the assorted Android phone companies

    b) How many of those million Nokia WinPhones are actually in use vs. shipped into the channel and collecting dust on a shelf?

    c) and Nokia *still* lost 1B euros even with the MS bribe.  Sad.

  • Anonymous

    “… confirming that the company sold more than 1 million Windows Phones …”
     
    LOL … for a definition of “sold” which includes “gave away for free.”

  • The Great Divider

    My limited math skills tell me this.  They sold 1 million phones and for that they have to pay Nokia $250 million.  That works out to $250 per phone.  It seems to be rather a lot.  No wonder Nokia can sell them for $99.

    • Anonymous

      Except that they can’t really afford to sell them for $99. They lost $1.4 billion, remember?

      It’s just grim.

  • Guest

    So MS makes less than $15 (gross) per phone license and pays Nokia $250? Ballmer’s a genius. Oh wait…not really. No wonder this company is dying and the stock has been cut in half during his tenure.

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