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Nokia's Windows Phone 7 deal with Microsoft may be worth $1bn

Microsoft is reportedly paying Nokia $1bn to make Windows Phones, over a five-year period. There is speculation, however, that the 'Mango' update may be delayed to 2012.

2 min read
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Why would Nokia give up on its own Symbian and MeeGo software to throw its lot in with Microsoft's Windows Phone OS? Try $1bn in cash. That's reportedly what convinced Nokia to shun Android in favour of Steve Ballmer's enthusiastically sweaty embrace.

This is according to Businessweek, which cites "two people with knowledge of the terms" of the deal between Nokia and Microsoft. What's more, Nokia also stands to shave as much as €1bn (around £860m) off its R&D expenses by switching to Windows Phone for its smart phones. Count us interested in bagging an invite to Nokia's 2011 Christmas party...

While the $1bn figure is good gossip, what does it mean for us punters? It hopefully means Nokia has plenty of incentive to get cracking on some genuinely impressive Windows Phones, for starters. The deal is also reportedly a five-year agreement -- albeit one that's not been signed and sealed yet -- showing that the two companies are in this for the long haul.

In the shorter term, though, there are separate reports that the much-anticipated 'Mango' update for Windows Phone 7 could be delayed until next year, according to WindowsITPro, meaning no multi-tasking, Twitter integration and Internet Explorer 9 browser until 2012. It has previously been suggested that Nokia is waiting for Mango to be available before releasing its first Windows Phone handsets.

Don't fret just yet, though. ZDNet.com's resident Microsoft-watcher Mary-Jo Foley says the company has promised phone-makers and operators that Mango will fall from its tree by early autumn at the latest, so they can get it into their handsets for Christmas this year.

Image credit: Engadget