Microsoft will pay Nokia more than USD 1 billion to promote and develop Windows-based handsets as part of their smartphone software agreement, two people with knowledge of the terms told Bloomberg. At the same time, Nokia will pay Microsoft a fee for each copy of Windows used in its phones. Accoring to the report, the two companies are still finalising the details of the agreement, which is expected to run for more than five years. A Microsoft spokeswoman declined to comment, while a spokeswoman for Nokia said the final contract hasn't been signed and the company will share further details when they are complete. Nokia's royalty payments will help Microsoft make a profit on the accord even after the payments to Nokia, according to Bloomberg's source. Some of the payment to Nokia would be made before the company starts selling the phones. The agreement for the more than billion-dollar payment was part of a campaign by Microsoft to keep Nokia from choosing Google's Android operating system. Nokia also opted for Microsoft because Windows Phone software, which is newer than Android and has a smaller number of handsets for sale, gives Nokia a better chance to stand out, one of the people said. The agreement also has Microsoft paying Nokia for the right to use its patent portfolio, according to the report.
