With a $1B Down Payment from Microsoft, Android Never Had a Chance with Nokia


When Nokia chose Microsoft’s Windows Phone 7 as the platform for their smartphones moving forward, many cringed and wondered why the company wouldn’t go with Android, an operating system that has proven its worth in the market. Aside from CEO Stephen Elop’s claim that he did not want Nokia’s new handsets to get lost on shelves already featuring so many Android devices, a new report is suggesting Microsoft slipped the mobile manufacturer $1 billion to sweeten the pot.

The $1 billion is part of a 5-year deal with MS, insuring their operating system is the first choice for Nokia for the foreseeable future. Consumers and ranting bloggers aren’t the only ones a bit thrown off by Nokia’s choice, either. As reported yesterday, Intel’s CEO expressed that he felt Android was the better choice.

With this new information, it seems unlikely Nokia might change their tune any time soon. We best move along and not think of the partnership that could have been.

[via BusinessWeek]

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  1. This is not like the time Intel Paid Dell to keep AMD out; Microsoft is paying Nokia for hardware development and the properties Nokia owns. The news makes it sound like a bribe or some kind of underhanded deal.

  2. Is anybody really surprised?

  3. The famous old school old ring tone maker

  4. I love Nokia’s build of their phones… :( too bad, too bad

  5. I like pennies more than 20 dollar bills!! lolz

  6. Very devilish… That was definitely a lot of wasted capital… Oh well i will rock on with the best OS in the industry that little green robot

  7. If nokia felt that with android software their phones will be lost on shelve some where what do they think is going to happen with the w7 software? if i was nokia i would reconsider the hiring of the idiot they got for ceo, this was his first move and he already put his company in a bind, this is going to be a big fail.

  8. @moises Nokia’s new CEO is an ex MS executive. (tin foil hat is on)

  9. I guess they forgot to mention the part where Nokia pays MSFT for every phone sold and how they are sharing development expenses.

    Personally, I am looking forward to the first Mircokia phones. If they ship with the Mango update, android could be in trouble. Nokia sold half a billion phones last year without a decent OS and without android. WP7 is pretty slick, so things could get interesting fast for Google.

  10. why cant CEOs be more honest, if he said we went with Microsoft because Microsoft paid more, we understand, but he says we went with Microsoft WP7, because it is better and offers a chance for differentiation, then we don’t understand.

  11. @SIGINT

    Half billion, right … how many are those cheap feature phones? Almost all. Not all Nokia phones are high end phone.

  12. If Nokia continues to price themselves out of the US market, then their partnership with Microsoft won’t really matter. They never had much of a market in the US with their smartphones. Most of their worldwide income came from their S40 dumbphones.

  13. And at this point, is WP7 really a factor? Android and iOS run the show. HP took too long to make decent hardware to go along with their decent OS, and Microsoft took too long to bring WP7 to market after the bomb that was Windows Mobile 6 failed. And we can’t forget about blackberry. Most smartphone buyers are android, iOS, and blackberry owners. Is there even enough room to go around for WebOS and WP7?

  14. LOL…That’s all I can do….

  15. sigint,

    android has almost matched if not beaten symbian over Q4 2010

  16. “CEO Stephen Elop’s claim that he did not want Nokia’s new handsets to get lost on shelves…”

    That is exactly what has happened to WP7. AT&T is now selling the Samsung Focus for $99, HTC Surround for $.01 and the LG Quantum for $.01. They cant even give those phones away. Good luck HTC Arrive!

  17. @Mark,
    Nokia sold more devices than HTC, Samsung, and LG combined. Again, without a drop of android in their DNA. Shortsighted people have quickly forgotten how massive and global Nokia is. A bad year for Nokia is equal to 5 years of sales for HTC.
    The majority of android phones are made of low end devices, not Evo’s so what is your point?

  18. I really don’t know what everyone’s getting worked up about.

    Not everyone wants an OS where they can customize and tweak everything. Some people just want to be able to do the usual smartphone tasks (web browsing, email, etc.) in a simple manner with a clean, efficient interface, which is why iOS and WP7 actually appeals to some people (inconceivable, I know /s).

    The market share for WP7 right now is small, Android has the largest market share now. So it would be easier for a Nokia device to “get lost on the shelf” amongst all the other Android options out there. WP7, on the other hand, with its smaller market share, would be easier to stand out in and presents a greater opportunity for expansion (though there is also more risk).

    So it’s either join what is now the mainstream, or take a risk and build something big. It just so happens that MS is helping Nokia with this risk with funding and other support. It would be relatively easy for Nokia to pick up Android in the future if they wanted to anyway. It is an open-source OS after all. And if they can get the hardware for WP7, they can most certainly get it for Android too.

  19. well, lets not forget the smartphone market is small. nokia does well selling feature phones. android is still on its way up!

  20. I wonder how much Nokia will end up paying back to M$ in a long run, if they ever decide to leave Windows Phone business?

  21. I don’t know, call me crazy, but economics 101 says competition is good. It drives prices down and innovation up, and the consumer wins.

    I’m quite glad Nokia chose Microsoft. I don’t own and probably never will own a Nokia phone, but if by making sure there are options in the market, it helps to ensure that my OS of choice will keep moving forward, and at a rapid pace, less be left behind…

  22. So Microsoft bought Nokia for only $1 billion? That’s a pretty sweet deal.

  23. Nokia is so far behind with the times, who cares. Their phones use to be unbelieveable. Now they are garbage.

  24. So MS has to pay people to use their OS now? I thought it was supposed to be the other way around…

  25. Meh. Whatever the case, Nokia+Microsoft will be looking to steal the market. In order to do that, they’ll have to create a better product. So either they make something so good that I actually jump ship to them, or they make something so good that causes Android+manufacturers to make something even better. Whatever the case, things look positive.

    I’m actually hoping WP7 goes up, since one of the things they have going for it is updates for everyone (unlike Android where manufacturer’s can just drop whenever they feel like it). If WP7 picks up competition, it might force android to somehow force updates, as that’s probably the biggest issue with the OS.

  26. I don’t get the Android fanboy furor around this.

    I think Nokia’s strategy actually makes sense. With HTC, Motorola, Samsung, LG, and a half dozen manufacturers all WAY ahead of them in the Android market… Nokia would never be more than a 2nd or 3rd tier player.

    But if Nokia focuses on WP7, they’ll be pretty different. And while I wouldn’t buy it in a million years, WP7 looks pretty good, and it looks much simpler than android, more accessible to the mass market that doesn’t want the complexity and features of android. You’ve got to think that both MS and Nokia will market the shit out of the phones and OS, and there’s enough muscle to get them good positioning with every carrier. And Nokia will by far be the leader in that segment (WP7) of the market.

    I personally have zero interest in WP7 and am firmly entrenched with Android (LAUNCH THE DAMN THUNDERBOLT ALREADY!), but I think the Nokia strategy has a lot of merit and applaud the CEO for taking a controversial path that I think is likely to pay off better in the long run.

  27. meh, It’s business lol. That’s just how business works

  28. At the end of the night, the desparate hook up. Just like being at the bar!

  29. Look Nokia isn’t stupid, they know Android is a fragmented mess of an OS right now and it’s going to get alot worse before it gets better. Look for Android growth to level off over the next 2 years with WP7 taking off next year when they have better hardware.

  30. In 5 years — when Nokia is remembered as the AOL of smart phones — this decision will stand out as the worst thing Nokia ever did.

    They have the resources to dominate Android handsets in the business world. They could even dominate in the consumer market. They could OWN the largest, most popular, most established phone market on earth.

    Instead, they choose temporary financial gain.

    I’ve added March 8, 2016, to my Google Calendar, so I can come back here and gloat over the corpse of the husk of a company that will be Nokia by that time.

    Of course, Stephen Elop will make hundreds of millions off this deal, and will cash out as the company sinks. Sign of the times.

  31. Typical Microsoft business tactics. Rest assured, if they held the majority of smartphone market share right now, there would be an anti-trust lawsuit over this in no time flat, but because they’re essentially in last place right now, they’re getting away with it.

  32. Puhlease! Money had nothing to do with it! Nokia simply doesn’t desire Android OS despite the similarities with their own OS. The point was to improve Nokia and the user experience, so the logical and smart choice was to go with Microsoft. The bottom line is, both companies are vested – Nokia still has to pay for Windows Phone licenses on Nokia devices. Nokia made the absolute winning decision.

  33. So waiting for Nokia wp7 “_

  34. So waiting for Nokia wp7 :)*

  35. Honestly, after this Vibrant debacle I got myself in, I can’t wait to see what Nokia/WM7 has to offer. I’ve always liked Nokia phones. They know what they are doing. And let’s not forget who Microsoft is. You guys act like Microsoft is the Kia of writing software, when in fact Android is the Kia while Microsoft is the Honda. Learn about it. That being said, I’m about to buy a Kia Optima EX…..LOL. I currently drive a Honda Civic.

  36. Nope, Microsoft is the Kin.

  37. I mean, come on. Baby blue and white icons + cutoff text = FAIL.

  38. I guess a saving grace is that “first choice” doesn’t necessarily mean exclusive. Android could still make it’s way on to low-mid range phones. I suppose it’s even possible to integrate into dumb/feature phones… just an idea.

  39. This could be the best thing to happen to Android. When the CEOs of HTC and Samsung realize that Nokia is getting kick backs from MS, do you think they’ll continue to invest as much in WP7 phones if they don’t get some kickback of their own. Soon, only Nokia will be making WP7 phones.

  40. Todd we saw this with Toshiba over the HD DVD/blu-ray wars. –

    Nobody really wants to develop for too many platforms. You need to know mac-only obj C and Microsoft-only c# to be a mobile developer? It’s truly nutty.

  41. Who really cares… Nokia never really cornered the market here in the U.S. as other handset manufacturers have, i.e., HTC. So all in all, in the end, that $1 Billion will wind up costing Nokia quite a bit more in lost revenue (potential) and lots of ground when they try to get in line with the next emerging round of handset development, if they’re still around by then, lol… Tisk Tisk…

  42. Let’s be honest. This hookup between Microsoft and Nokia spells disaster written all over it. If WP7 was that great of an operating system, other cellphone manufactures who have it on their phones would actually be reporting decent sales, WHICH THEY AREN’T!! Nokia will be just another manufacturer creating a phone with an operating system nobody wants. For Nokia to dump Symbian is BEYOND STUPID!!!Outside the U.S it’s the number one mobile operating system, people like it. If Nokia had a brain they would spend the money to either partner with other manufactures and help to promote Symbian or dump some money into the U.S Market and promote Symbian themselves. The WP7 deal could lead Nokia in the end to the verge of bankruptcy. Bad business deal definitely.,

  43. Oh well, I like android better anyways. The Market players are definitely Android, Apple and Blackberry. HP Palm and WP7 can just hang it up.

  44. Nokia is going to lose much more than $1 billion as a result of adopting the WP7 lemon.

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