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Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Matt Day.

April 21, 2011 at 9:45 AM

Microsoft and Nokia seal mobile deal worth billions

Microsoft and Nokia have sealed a mobile deal.

The world’s largest software maker and the world’s largest phone maker said they signed a definitive agreement Thursday worth billions of dollars to Nokia.

The agreement will make Windows Phone 7 the primary operating system for Nokia’s smartphones, giving Microsoft a big boost in the competition against Apple’s iPhone and Google’s Android operating system.

The companies expect large numbers of Nokia Windows Phones to start selling in 2012, although the first device may start selling in 2011, the companies hinted in a blog post.

“Hundreds of our team members are already working together toward a multi-year product roadmap and are on-schedule to deliver volume shipments in 2012 although the pressure is on for first delivery in 2011,” the two companies said in a blog post written by Nokia’s Kai Oistamo and Microsoft’s Andy Lees.

The agreement includes the following terms, the two companies said:

Sharing services. Nokia, which runs Navteq, will provide mapping and location-based services to all Windows Phones. Microsoft’s search engine Bing will provide search services on all Nokia phones. The two will also open a Nokia-branded app store.

Microsoft will receive software royalties from Nokia for Windows Phone 7 as the devices ship.

Nokia will receive payments from Microsoft worth “billions of dollars” that values that unique arrangement with Microsoft. The companies did not give an exact number.

Microsoft will also pay Nokia for use of Nokia’s intellectual property.

“Our agreement is good for the industry,” said Microsoft Chief Executive Steve Ballmer, in a statement. “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.”

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