The 2011 Mobile World Congress was this week and news came in from any and every mobile developer and manufacturer who was boasting the newest, latest and greatest handset and features. Of course, we expected to see Nokia and Microsoft also make their presence known during the event, especially after critics were skeptical if Nokia may have gotten the bad end of the deal when they partnered up with Microsoft's WinPho 7 handsets. In an effort to dispel any notion of that sort, Nokia CEO Stephen Elop was very quick to note that the deal will be beneficial for both parties involved. Elop announced payouts and benefits that Nokia will receive for deciding to stick by the Window-side.
Obviously we know that Nokia will have to pay an undisclosed royalty fee every time they choose to use the operating system but Elop said Nokia will get "very substantial reductions" when it comes to what their spending on their everyday operations, including layoffs, since they no longer need to employ a workforce to develop an in-house OS.
Want to hear more thoughts from the adamant Elop? Click the break.
Because of a lack of an announcement that Nokia would be reducing its research spending budget, shares fell 14% on Friday, clearly citing investor disappointment.
However, Elop is confident that even though Nokia may have some troubles getting back into the mobile market, at least here in the US, he said that they still have a strong foothold in the world market and only look to improve. It was then that he announced that while they may have made a deal with Microsoft, they were in talks with Google as well and while Nokia has lost a lot to the Android and iPhone platforms, by volume, it still is the #1 manufacturer of mobile handsets worldwide.
As we discussed on our show last week, this move was genius on Nokia's part. Anytime you team up with Microsoft, over time, you're bound to come out with at least some sort of ground gained in whatever field you're playing in. For Nokia, the ball was in their court, as they knew that whoever they decided to go with, it would impact the entire market and benefit the side they chose. Google knew that and was even willing to offer an extremely favorable deal to the company to sway them to Android. Nokia wanted none of that as Elop was noted to have said that the move might have created a market of just Android and iOS devices, and that was something he did not want to do.
Whatever the case, the money Microsoft offered Nokia was enough to make sure they could sustain research, development and deployment of any new devices that would uniquely identify a Nokia phone from any other.
Microsoft has placed a value on our decision to go in one direction and not another.
The new head of Nokia smartphones, Jo Harlow, has made brief mention that we should expect to see a Nokia Windows device sometime in 2011 but didn't say when. During the transition to the Windows platform, she did say that the revenue from the Microsoft deal would allow them to freshen up the Symbian platform until the newer devices are ready to go to market.
It should be noted that Elop definitively stated that Microsoft buying out Nokia was "never on the table" during any part of the discussion between the companies.