Microsoft’s $250M Nokia Gamble Fails To Improve Market Share

Microsoft is desperate to steal market share from Apple and Google, while Nokia is looking to inject its devices with a competitive edge. So far a lot of money has been spent by Microsoft to see Nokia’s market share dwindle.

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In the fourth quarter alone of 2011, Microsoft paid Nokia $250 million to use Windows Phone 7 as its primary smartphone platform. The move works out well for Nokia as they get a better OS than their Symbian concoction and paid for doing so.

The payment was disclosed in Nokia’s earnings summary, which also details Microsoft’s plans on spending billions more.

“In the fourth quarter 2011, we received the first quarterly platform support payment of USD 250 million (EUR 180 million). We have a competitive software royalty structure, which includes minimum software royalty commitments. Over the life of the agreement, both the platform support payments and the minimum software royalty commitments are expected to measure in the billions of US Dollars.”

ComputerWorld were the first to identify the disclosed payments. 

In October, Nokia and Windows revealed the first fruits of their collaboration: two Nokia smartphones running Windows Mango. The Lumia 710 and 800 introduce no noteworthy new features and make use of mediocre hardware, proving no threat to Apple’s dominating iPhone 4S nor the myriad of ultra-powered Android smartphones.

Read: iOS Rule: Nokia, Droid Drool – Apple King AGAIN

Despite this, Microsoft is banking on the success of these phones as it looks to increase its paltry 5 per cent market share, while Apple and Google prosper with double digit dominance.