Earlier today, while looking at Intel’s claim that Nokia made the wrong choice in going with WP7 instead of Android, we mentioned the possibility of Nokia’s decision being motivated by a cash offer from Microsoft. Since then, Bloomberg has published supposed details of the arrangement, which come out to over one billion dollars in payments from Microsoft to Nokia.
Now certainly, when we’re talking about sums this large, Intel’s claim that Nokia’s judgement was affected by the offer sounds a little more plausible than when there was no figure available. Even still, it’s not the cut-and-dry payment it sounds like, as the deal reportedly involves a lot of money changing hands in both directions; this billion is far from just a signing bonus.
Nokia will benefit both from this payment, as well as the money it will save on OS development costs. At the same time, it will start paying licensing fees to Microsoft when it starts shipping WP7 devices, sending some of the billion back where it came from. The cycle will supposedly continue on, with Microsoft paying Nokia for the use of its patent portfolio, as well as the use of IP it holds, like Navteq mapping software.
All this money changing hands will hopefully lead to strengthening the Nokia-Microsoft relationship, and ultimately driving Nokia to release some really impressive WP7 hardware.