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Nokia Microsoft Merger worth $1bn

We check in the Nokia Microsoft merger; it’s updated on goings from both ends. How the deal has affected both parties in terms of overall revenue generation and business growth.

Author: Michael Shai
Date: Mar 10, 2011 - 11:37:49 AM

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The two companies are now in the spotlight contextual to Nokia’s fusion with Microsoft’s Windows Phone 7

Recent reports suggest that digital broadcaster Microsoft could have to part with a sum of $1bn (£670m) to which, Nokia would be at the receiving end of in way of their agreement to work in conjunction for Windows Phone software on Nokia handsets. Conversely, latest reports have now confirmed that a previous statement made by Nokia CEO Stephen Elop suggesting that Nokia would in barter, pay Microsoft a licence to use the Windows Phone software is factual.

Another report by Bloomberg also substantiated the fact that Nokia would offset licensing costs by cutting down on its own £2bn research and development resources.

In an unwanted outcome however, Nokia’s share price has declined by a staggering 26 percent, post the deal with Microsoft which was announced on 11 February. Furthermore, Bloomberg also validated that a share of Microsoft’s sum would be paid upfront while on the other side of the table, Nokia would only initiate its payments for the license fee once the phones commence the sales process with the Windows Phone software.

Another payment would also come Nokia’s way as Microsoft would pay up for the usage of Nokia’s patent portfolio usage. At the launch of this venture, Mr. Elop argued that one of the primary rationales for Nokia to tie up Microsoft and not Google’s Android mobile operating software system was due to the Nokia being permitted to engulf value from its skills and mapping technology. Nokia had procured Navteq, a mapping firm in 2007. It has been noted that ‘Ovi Maps’ application has been the company’s success factor in recent times with a few other fruitful predecessors.

Michael Shai is a proud contributing author writing articles on subjects including online marketing, website design, social media, ecommerce and other online techniques. You can view more information on our Web Design London Agency or Digital Agency London services at Digital Broadcasters.

View all articles by Michael Shai

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