Ina Fried

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Microsoft’s Millions Help Cushion Nokia’s Windows Phone Transition

While it’s clear that Nokia’s transition away from Symbian will be a bumpy road, Microsoft’s cash is helping to ease the pain.

As part of Thursday’s earnings report, Nokia noted it received $250 million from Redmond in the first of many quarterly “platform support payments.” It’s part of what the company says will ultimately be billions of dollars in support of its shift to Windows Phone.

Nokia also notes that it pays Microsoft royalties on each phone and has guaranteed minimum commitments, an amount it also expects to ultimately be measured in the billions of dollars.

Last quarter, though, the money flow was clearly toward Nokia, with the company saying it shipped somewhere north of 1 million Windows Phones.

Those payments are going to be needed by Nokia, which noted on Thursday that its Symbian sales are slowing considerably faster than it had predicted.

Nokia had hoped to sell 150 million more Symbian devices even after announcing its Windows Phone transition. It said on Thursday that it no longer expects to reach that level. It didn’t provide a new estimate but said it took charges in the fourth quarter related to both excess inventory and future purchase commitments.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik