DONE DEAL! Microsoft, Nokia officially sign WP7 pact

DONE DEAL! Microsoft, Nokia officially sign WP7 pact

It’s official. Nokia and Microsoft have signed the pact that would see Nokia, long struggling with its Symbian OS, use Windows Phone 7 with their brand feature new phones; among other joint contributions in order to improve the OS experience.

The deal, according to Microsoft, was completed “ahead of schedule”. Microsoft and Nokia has also confirmed that Nokia is already in development of porting its key applications and services from the previous Symbian OS to Windows Phone 7.

The deal allows Windows Phone 7 to access mapping technology from Nokia, including its navigation and location-based services – something that Nokia does better than rival google. It will also see Nokia able to use Windows Marketplace infrastructure to manage its Ovi App Store for all of its mobile operating systems it currently uses. The deal, of course not highlighted by Microsoft, gives Windows Phone 7 access to the still-dominant player of the mobile market (it is, however, hanging by a thread, thanks to new markets).

Nokia will still need to pay royalties for using Windows Phone 7, starting when the first phones ship from its doors; but Nokia will also receive payments from Microsoft in part due to “recognition of the unique nature of [the] agreement” – which most likely be royalty payments for using key Nokia technology as well.

Nokia is still committed to bring out a new Windows Phone 7 phone by 2012. However, with so little Windows Phone 7 phones out there in the market today, Nokia and Microsoft really should start fast-tracking its development before it gets killed by the BlackBerry, iOS and Android.

Full press release is below:

Nokia and Microsoft Sign Definitive Agreement Ahead of Schedule

Key contributions to new global mobile ecosystem agreed and significant progress made on engineering of new products.

ESPOO, Finland and REDMOND, Wash. – April 21, 2011 – Nokia (NYSE: NOK) and Microsoft (NASDAQ: MSFT) today announced the signing of a definitive agreement on a partnership that will result in a new global mobile ecosystem, utilizing the very complementary assets of both companies. Completed ahead of schedule, the definitive agreement is consistent with the joint announcement made on February 11.

In addition to agreeing to the terms of their partnership, including joint contributions to the development of the new ecosystem, Nokia and Microsoft also announced significant progress on the development of the first Nokia products incorporating Windows Phone. With hundreds of personnel already engaged on joint engineering efforts, the companies are collaborating on a portfolio of new Nokia devices. Nokia has also started porting key applications and services to operate on Windows Phone and joint outreach has begun to third party application developers.

“At the highest level, we have entered into a win-win partnership,” said Stephen Elop, President and CEO of Nokia Corporation. “It is the complementary nature of our assets, and the overall competitiveness of that combined offering, that is the foundation of our relationship.”

“Our agreement is good for the industry,” said Steve Ballmer, CEO of Microsoft. “Together, Nokia and Microsoft will innovate with greater speed, and provide enhanced opportunities for consumers and our partners to share in the success of our ecosystem.”

The relationship is structured around four broad areas:

1. A combination of complementary assets, which make the partnership truly unique, including:

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.

2. 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.

3. 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.

4. 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.

With the definitive agreement now signed, both companies will begin engaging with operators, developers and other partners to help the industry understand the benefits of joining the new ecosystem. At the same time, work will continue on developing Nokia products on the Windows Phone platform, with the aim of securing volume device shipments in 2012. The scale of the mutual commitment from both companies is significant and is in keeping with the intention to build a new ecosystem based on a long-term, strategic partnership.

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