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Nokia CEO Stephen Elop.  (Source: WPCentral.com)

Newly appointed President of Nokia Inc. (US), Chris Weber.
Microsoft to pay out billions in blockbuster deal with Nokia

While the blockbuster deal that's amped to put Windows Phone 7 on all Nokia smartphones --essentially phasing out Symbian and making WP7 the world's second-most popular mobile OS in its place -- is supposed to benefit both parties involved, it has thus far been met with mixed reaction. 

The day the deal was announced Nokia's shares dropped 14 percent, and a number of employees -- many on the beleaguered Symbian side -- used the company's flextime program to go home early.

Then, at the Mobile World Congress event in Barcelona over the past weekend, Nokia CEO Stephen Elop was forced to go on the defensive, Business Insider reports, after an audience member asked if he was a Trojan horse. 

"The obvious answer is no," Elop replied. "We made sure that the entire management team was involved in the process, and of course the board of directors of Nokia are the only ones that can make this significant of a decision about Nokia. They made that final decision on Thursday night."

The question was an obvious reference to Elop's past at Microsoft, where he was an executive for two years before taking the top spot at Nokia. To some, it may seem a little strange that Nokia would make such a partnership with Microsoft, particularly after its 10-year investment into Symbian. 

Elop also had to defend his shares of Microsoft stock, which Business Insider reports to be approximately 130,000 shares worth nearly $3.18 million.

Conspiracy theorists received additional ammunition Friday, when Nokia announced Chris Weber as its new president of Nokia Inc. (US) and head of the North American market after current president, Mark Louison, "decided to leave Nokia and pursue new career opportunities." Weber spent 16 years at Microsoft, where he held executive positions as high as corporate vice president.

While solid details of the agreement between the two companies have not been released, news surfaced over the weekend that sheds light on just how big the deal is. According to Computer Worldwhile showing a slide that portrayed Microsoft's investments flowing in Nokia's direction, Elop said, "the value transferred to Nokia is measured in Bs not Ms." Meaning, Microsoft pay-out to Nokia in the deal would be in the billions, not millions, of dollars. No additional details were given, like over how many years the investments would take place.

We also learned that Google was actively pursuing Nokia in what could have been a similar deal, but Microsoft won out, according to Elop. "If you combine the current market share of Android with the market share that Nokia could deliver to Android over the next couple of years, it’s a very large number. One could believe the mobile industry thereafter would be some form of duopoly," Elop said. The decision to go with Microsoft over Google was made to change the dynamic and make it "a three-horse race," as Elop said. Presumably, the multi-billion-dollar investment doesn't hurt, either.

As for availability, a top executive told Computer World that the first WP7-powered Nokia's will be available this year.



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How do they know?
By repatch on 2/14/2011 12:50:57 PM , Rating: 2
This line has been quoted a few times, and bugs me every time: "and making WP7 the world's second-most popular mobile OS in its place"

How do people know that's true? At they simply assuming that Nokia will hold it's current market share, that iOS and Android will remain the same, and that status quo will stay for years to come?

Hint: putting WP7 on ALL Nokia devices will NOT happen overnight, in fact it won't happen for a long time. Why? THE majority of Nokia's market share are FEATURE PHONES. While feature phones will undoubtably be getting more powerful, even enough to probably run a very cut down version of WP7, where will the rest of the market be?

Fact is, Nokia was in trouble, Symbian was a dead end, the only reason it stayed so long is the rest of the world was used to it. Same as RIM here in NA.

As for Nokia "choosing" Mickeysoft, it wasn't much of a choice, they NEED the cash infusion, and there is no doubt that Mickeysoft NEEDED Nokia way more then google, so there was simply more money on the table.

In the end, I don't see Nokia surviving, but we'll see, been wrong many times.




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