Microsoft pays Nokia 250 million dollars to push Windows Phone 7

According to Nokia’s fourth quarter earnings report – Microsoft paid Nokia $250 million in the quarter for “platform support payments”.

Here’s the quote:

Our broad strategic agreement with Microsoft includes platform support payments from Microsoft to us as well as software royalty payments from us to Microsoft. In the fourth quarter 2011, we received the first quarterly platform support payment of USD 250 million (EUR 180 million). We have a competitive software royalty structure, which includes minimum software royalty commitments. Over the life of the agreement, both the platform support payments and the minimum software royalty commitments are expected to measure in the billions of US Dollars.

Source

Strategic takeaway from all that is, Microsoft has no plan B for Windows Phone. Nokia is it.

Sink or swim, Windows Phone is tied to the Nokia platform for the foreseeable future.

Nokia also reported that they have sold at least 1 million Nokia Windows Phones. If true that would be a respectable number relatively speaking ( and assuming you pretend Apple doesn’t exist).

Despite all the positive attention the Nokia Lumia phones have been getting, the big question mark that remains is what happens when Apple release the Iphone 5 this year?

Based on previous Iphone releases, I would bet that the release of a newer sleeker Iphone 5 would effectively dominate the mobile phone space this year. If Apple make substantial positive architectural changes to the Iphone, it would be a setback to the current narrative of Windows Phone Mango being competitive.

However if Apple stumble with a mediocre release (unlikely) then Microsoft and Nokia have a good story to tell over then next year re: Windows Phone 8 and full integration with Windows 8.

This will be fun to watch…

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