Although Nokia will pay Microsoft a fee for each copy of the Windows Mobile operating system it uses in its next-generation smartphones, these costs will be offset against its own R&D, earning it an effective $1-billion.
So far, no agreement has been signed and neither company was willing to comment on the details, but it’s believed the deal will result in an effective gain of $1-billion for Nokia.
Nokia’s CEO Stephen Elop said in February, when he announced that the cell phone manufacturer would switch to the Microsoft platform, that Nokia was being well paid for the move.
The pending agreement between the two companies is said to have a lifespan of five years.
As smartphones have become increasingly popular, Nokia – previously the market leader in the cell phone market – has lost massive market share.
It is hoped that the move to a Windows platform will help it compete more effectively with rivals like Apple’s iPhone and products running the Android operating system.