The big news today is that the Microsoft-Nokia collaboration agreement has finally met with agreement. The two technology giants revealed many of the broad strokes of the contract’s ink on paper back in February when we reported that Microsoft would subsidize Nokia with at least $1 billion to get Windows Phone 7 onto the Finnish company’s smartphones.
Looking over the press releases about the deal, Matt Rosoff of Business Insider has concluded that the deal will lead Microsoft to pouring at least $2 billion on Nokia’s raging fires of innovation. In fact, from what we’ve seen, since they penned the deal back in February the two companies have not been sitting on their hands waiting to hammer out the deal; but they’ve been working busily together to get on track. Such as how they provided motivations for their developers to prepare for the wedding of the two technologies.
The original amount was stated to be about $1 billion, but Rosoff saw something in the press release that makes him think otherwise,
… [T]oday’s press release puts the value higher:
“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.”
Nokia will also receive additional payments as part of an intellectual property exchange.
Nokia’s VP of Microsoft Alliance, Waldemar Sakalus, said that there is “tremendous pressure” to deliver their first joint phone this year, but they don’t expect shipments in big volumes until 2012. In a March financial filing, Nokia said it doesn’t expect to complete the transition from Symbian to Windows Phone until 2013.
I never expected to hear Stephen Elop and Steve Ballmer speak on the same topic that I have to quote them from the press release. Certainly, Elop is probably ecstatic about his corporation’s monumental alliance with Microsoft as it highlights the zeal and passion behind his “burning platform” memo.
“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.”
I expect that we’re seeing Elop jumping for joy here. Nokia has in fact jumped from their burning drilling platform into dark waters and landed solidly on Microsoft’s oil tanker. Ballmer is really blowing his corporation’s own horn about the deal—and they should, they’re pouring a lot of money onto Nokia to get it to happen.
“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.”
This collaborative alliance signals a new era in Nokia’s business model and with the fruits of the labor expected in 2013, it represents a solid foundation at least in the short term. Two years from now we may well be reporting in retrospect how the transition from Symbian to Windows Phone has gone. Although, it seems difficult to expect that Nokia will ever actually abandon their darling OS, it may be in 2013 it will have been edged out by Microsoft’s overwhelming momentum.