Microsoft Will Pay Nokia More Than $1 Billion In Smartphone Deal [REPORT]

Microsoft will pay Nokia more than $1 billion for the promotion and development of Windows Phone 7-based smartphones, Bloomberg reports.
If true, this report confirms the February statement of Intel CEO Paul Otellini, who said Microsoft has paid Nokia an “incredible” amount of money for the smartphone deal.
According to Bloomberg‘s sources, the Nokia-Microsoft deal will last more than five years; under the terms of the agreement, Nokia will pay Microsoft a fee for each copy of WP7 used in its smartphones, which should eventually return Microsoft’s billion dollar investment. Besides Microsoft’s monetary help, Nokia will also be able to cut the budget for research and development to offset the costs.
None of this was officially confirmed by either company, but — if true — the report sheds some light on the inner workings of a humongous deal like this one, showing perhaps that Nokia’s final decision to switch to WP7 was not only about the platform itself.
Google’s Eric Schmidt recently said Google had “tried hard” to persuade Nokia to switch to Android, but with a quickly rising Android market share, Google was probably not as anxious as Microsoft to a partner with Nokia. It is likely (which Otellini also claims) that Google offered Nokia a similar deal but was simply outbid by Microsoft’s generous offer.