Nokia's commitment to WP (and to those that question it)

[dogfish54]

I found something really interested buried in Nokia's earnings report.

'The total amount of the platform support payments is expected to slightly exceed the total amount of the minimum software royalty commitments. In accordance with the contract terms, the platform support payments and annual minimum software royalty commitment payments continue for a corresponding period of time.'

This paragraph and the ones prior to it, is talking about the 'billions' that Nokia is getting from Microsoft to support Windows phone.

To save you from reading the whole thing, basically Nokia is contractually bound to buy a minimum amount of Windows Phone OS licenses from Microsoft, and Microsoft will pay Nokia for supporting the platform. The crux is that Nokia really isn't getting a lot of money from MS, they are getting a bunch of free Windows Phone OS licenses (somewhere between 10 and 20 million a quarter I would estimate) with a small amount of cash on top.

So Nokia only does well if they sell a LOT of WP's. They don't do well if WP doesn't do well, there is no big cash payout as most people think.

 

[cckgz4]

Hmmm

Sent from my Lumia 900 using Board Express

 

[chevans920]

Makes sense, as MSFT doesn't technically need Nokia (although I am very happy they have partnered). They have the budget to support this approach into the market place.

Looking at the risks of using R&D funds to launch a WP8 device into the market place vs cheaply delivering licenses of software they have already build to known device manufacturers, it seems to be the smart move. Just my opinion.