Microsoft Pays $250M to Nokia in Q4 2011

Nokia is the largest handset vendor in the world to have adopted Microsoft’s Windows Phone operating system, and the move is slowly starting to pay off for the Finnish company, it seems.

In the fourth quarter of last year, Nokia launched its first Windows Phone devices, the Lumia 800 and Lumia 710. This year at the 2012 International Consumer Electronics Show in Las Vegas, the company launched a third such device, the Lumia 900.

While sales haven’t been spectacular, nor anywhere near spectacular, for that matter, Nokia did receive a payment from Microsoft for adopting its mobile platform.

As part of its financial results statement for the fourth quarter of the year, Nokia announced that it received USD 250 million from Microsoft.

The payment was part of the deal the two struck about nine months ago regarding the loading of Windows Phone on Nokia’s smartphones.

“Our broad strategic agreement with Microsoft includes platform support payments from Microsoft to us as well as software royalty payments from us to Microsoft. In the fourth quarter 2011, we received the first quarterly platform support payment of USD 250 million (EUR 180 million),” the company said.

The Finnish handset vendor also announced that this was only one payment coming from Microsoft as part of the agreement.

“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,” Nokia explained.

Lumia 800 and Lumia 710, the first smartphones that Nokia released with Microsoft’s Windows Phone operating system on board, were sold in “well over 1 million units” to date. The figure is not impressive, but it looks encouraging for the first two months of availability, that’s for sure.

In 2012 and beyond, sales of Nokia’s Lumia devices should increase significantly, courtesy of new launches, such as the Lumia 900. This year alone, the company is expected to sell over 37 million Windows Phone handsets, and the number should almost double in 2013.