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Nokia CEO Stephen Elop
"I'm gonna make him an offer he can't refuse."

Nokia ruffled more than a few feathers when it announced that it would be shacking up with Microsoft when it comes to smartphone operating systems. Feeling the heat from smartphone operating systems like Apple's iOS and Google's Android, Nokia is winding down its efforts with MeeGo and Symbian in order to embrace the nascent Windows Phone 7 (WP7) operating system.

Now, a new report from BusinessWeek suggests that Nokia was offered a sweet deal to go with Microsoft’s WP7 operating system over the rival Android OS. BusinessWeek says that Nokia will receive roughly $1B as a part of a 5-year deal with Microsoft.

Microsoft, of course, will also profit handsomely from its $1B investment if Nokia's WP7 offerings take off in the marketplace. Unlike with Google's freely available Android OS, Nokia will pay Microsoft a royalty fee for each WP7 handset that it sells.

“This gives Microsoft scale and allows Nokia to rip out costs,” said Colin Gillis, an analyst at BGC Partners in New York, who recommends buying Microsoft shares. “Microsoft is getting the platform boost.” 

Although $1B USD is a nice motivator to adopt WP7, Nokia's Stephen Elop claims that Nokia would have gotten lost in vast sea of me-too Android devices, and that the Microsoft partnership gives it a chance to shine. “A decision to go with Windows Phone creates a very different dynamic. Windows Phone is a challenger. It becomes a three-horse race,” said Elop according to Mobile Beat.

Nokia’s Symbian operating system has been under a constant assault from Android. Android overtook Symbian as the world’s best-selling smartphone operating system in Q4 2010 (33.3 million units versus 31 million units).

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For the better I'd say
By Aihal on 3/7/2011 7:11:04 PM , Rating: 2
Even though i never personally liked these "incentives" to help make decisions, I'm glad Nokia went the WM7 way for the exact same reason mentioned in the article: There are way too many Android offerings, and Nokia would have had a hard time getting to be a noticeable participant (Samsung and HTC are kings there).

RE: For the better I'd say
By Brigga on 3/7/2011 7:21:50 PM , Rating: 2
I agree. I am waiting for when I can try a WinPhone7 device to see how different it is. Iphone meh, Android meh, still using symbian... meh. While some might not see this as relevant I believe giving too much power to Google is not a good thing. Competition is the only way to go. Maybe I am getting old but I just trust Google less and less these days. Bring on the Google lovers who can't see the forest for trees...:-)

RE: For the better I'd say
By bplewis24 on 3/7/2011 10:36:12 PM , Rating: 2
All the same players exist with WP7 that exist with Android except Motorola so far. That "reasoning" was entirely bogus from the very beginning. They do have one advantage over WP7's other partners in that they have the option to skin their phones (which they claim they will not do initially), but other than that they are simply a "preferred parter" at this point.

So the fact that you agree with it proves that they successfully pulled the wool over a few peoples' eyes.


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