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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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RE: is this any surprise?
By bplewis24 on 3/7/2011 10:31:30 PM , Rating: 3
Google is the one destroying competition by giving Android away free.

That doesn't really make sense.

Essentially giving away Android to handset manufacturers for free encourages competition because it lessens the burdens/barriers of entry for each manufacturer/OEM.

Also, it forces handset manufacturers to compete with each other in rapidly developing new hardware and making compelling software for their devices (not always a good thing), thus speeding up the hardware turnover cycle and driving down prices faster.

Google isn't about destroying competition. Most of the markets they enter already have a major player in them.


RE: is this any surprise?
By someguy123 on 3/8/11, Rating: -1
RE: is this any surprise?
By Taft12 on 3/8/2011 12:06:30 PM , Rating: 2
Android being free is anti-competitive because it requires resources that very few have to make a reality.

What?? You and I have the same resources available to us that Google used and is using to build Android!

This is why the GPL is a good thing. Don't reinvent the wheel when you already have it sitting there right in front of you.

Operating systems are commodities now. Save your development resources for filling niches. That's the way the software world works today and we are all so much better off for it.

RE: is this any surprise?
By someguy123 on 3/8/2011 1:54:45 PM , Rating: 2
Yes it's open source but that doesn't mean you or I have the man power to produce a fully functional phone OS.

It's just insane that google gets love for this merely because it's open source. How are people going to compete with free software developed through a massive company like Google? It is the very definition of anti-competition when it comes to software, especially since they're not only developing, but also actively pushing and distributing.

If you appreciate what this does for the industry, that's another thing, but to deny that this stifles competition is ridiculous.

RE: is this any surprise?
By Landiepete on 3/8/2011 4:18:44 AM , Rating: 2
You're ignoring one of the basic realities.

Research an developement is expensive business. It takes a major investment, not only monetary, but also in time and effort to develope a cute idea into something useable. Morover, the return is unknown, and depends largely on the ability to monetize the outcome.

Google is in a position where it can constantly scan the market for things that look interesting or promising.
If they detect anything that tickles their fancy, the gigantic amount of money and resources they're sitting on allows them to develop an alternative at breakneck speed, and then 'give it away for free' to gain momentum. They do not have to worry about getting (ginger)bread on the table before a product gains the necessary traction to make it a success.
This is different to (e.g.) the strategy Microsoft has employed for many years, simply buying out small ompanies with promising tech.

Google is skewing the 'normal' supply and demand and R&D simply because they have too much money.

RE: is this any surprise?
By fishman on 3/8/2011 9:57:56 AM , Rating: 2
Google is skewing the 'normal' supply and demand and R&D simply because they have too much money.

The same is true for Microsoft. Look at how much money they have dumped on the Xbox before it became profitable. And they are willing to spend many billions on Windows Phone.

RE: is this any surprise?
By someguy123 on 3/8/2011 1:56:54 PM , Rating: 3
Yet people agree with you.

Point out that google is doing the same and people will ignore reality in favor of free software.

"It looks like the iPhone 4 might be their Vista, and I'm okay with that." -- Microsoft COO Kevin Turner

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