Bloomberg is reporting that Microsoft will end up paying Nokia over $1 billion for the recent Windows Phone 7 deal, through development and promotional costs.
“Nokia will pay Microsoft a fee for each copy of Windows used in its phones, costs that will be offset as Nokia curtails its own budget for software research and development,” says one of the sources even though the full agreement has not been signed yet.
The deal will last for “over 5 years.”
Most analysts have called the deal a winner for Microsoft, who will gain a huge platform boost for a relatively insignificant amount of money. Nokia, on the other hand, has seen their shares fall 25 percent since the announcement, as investors doubt the move will help fix Nokia’s faltering market share.
Additionally, margins at Nokia have fallen to just 5 percent in 2010 from 19 percent in 2001.
Result for: research and development
Nokia has sued Apple this week over the popular iPhone smartphone, claiming Apple infringes on Nokia patents.
There are 10 patents up for dispute, each of which relate to technologies “fundamental to making devices compatible with one or more mobile standards.”
Nokia went as far as to say that they had invested about $60 billion USD in to research and development and that Apple did little to compensate them for the patents.
The patents range from wireless data, speech coding, security and encryption on all iPhone models from the iPhone 1G to the iPhone 3GS.
“The basic principle in the mobile industry is that those companies who contribute in technology development to establish standards create intellectual property, which others then need to compensate for,” said Ilkka Rahnasto, vice president for legal & intellectual property at Nokia, via the WSJ. “Apple is also expected to follow this principle.”
Nokia has license agreements with over 40 companies allowing them to use the mobile technology.
It is unclear how much Nokia is seeking in damages but many expect the figures to reach the billions.
Result for: research and development
According to a report by the DigiTimes, it seems that the Blu-ray Disc Association (BDA) has now officially granted licenses to 11 Chinese manufacturers, meaning the consumer should see a larger selection of standalone Blu-ray players soon, and hopefully with cheaper price points.
Masayuki Kozuka, general manager for Matsushita Electric Industrial’s storage device business, and a member of the BDA board, made the announcement during a recent technology trade fair in China.
The 11 “Format and Logo Licence Agreements” which were granted will allow “licensees to use specifications solely to develop, manufacture and sell BD products.” It also gives rights to the actual Blu-ray logo.
It is not known whom has been granted these licenses but it is expected that at least that China Hualu Panasonic AVC Networks, “a joint venture between Panasonic and the China-based Hualu Group” has received one of the grants. The licenses should cover Blu-ray research and development as well as production of discs, players and computer drives. Because of the licenses, volume production should begin in early 2009 from these Chinese manufacturers.
