Microsoft and Nokia on Thursday formalized their partnership with a definitive agreement to develop Windows Phone 7-based Nokia devices. The two companies also said they have made "significant progress" in the development of such phones.
"At the highest level, we have entered into a win-win partnership," Stephen Elop, president and CEO of Nokia, said in a statement. "It is the complementary nature of our assets, and the overall competitiveness of that combined offering, that is the foundation of our relationship."
Microsoft also confirmed that "Nokia will receive payments measured in the billions of dollars."
"Our agreement is good for the industry," said Steve Ballmer, CEO of Microsoft. "Together, Nokia and Microsoft will innovate with greater speed, and provide enhanced opportunities for consumers and our partners to share in the success of our ecosystem."
Nokia and Microsoft first announced plans to work together in early February, but after 10 weeks of negotiations, they have now formally laid out the terms of the deal.
Specifically, Nokia will provide mapping, navigation, and other location-based services for Windows Phone, while Microsoft will provide Bing search services across the Nokia platform.
There will be joint outreach to developers, and Microsoft will drop the Windows Phone developer registration fee for Nokia developers. The two companies will also open a new Nokia-branded global app store that leverages the Windows Marketplace infrastructure, they said. Developers can publish and distribute through a single portal, reaching Windows Phone, Symbian, and Series 40 users.
Both companies have mdae "significant progress on the development of the first Nokia products incorporating Windows Phone," they said in a release. There are "hundreds of personnel already engaged on joint engineering efforts [for] a portfolio of new Nokia devices." Nokia has started porting key apps and services to the Windows Phone platform, and outreach to third-party app developers has started.
Nokia and Microsoft are still on track to start shipping devices in 2012, they said.
"In the coming years we will aggressively work to take Nokia products using Windows Phone to new geographies, at new price points and sharing new experiences for customers around the world to enjoy," Nokia's Kai Oistamo and Microsoft's Andy Lees wrote in a blog post.
Since the deal was announced earlier this year, the number of Windows Phone apps submitted on a daily basis has almost doubled, Oistamo and Lees said. "Developers like Angry Birds maker, Rovio; deal of the day supersite, Groupon; hot social app, Ditto; and UK mega-retailer, Sainsbury's, are all committing to the Windows Phone platform," they wrote.
The duo promise an increased focus on mobile business and productivity scenarios that build on Microsoft's cloud services, new features for Symbian, and new capabilities for Windows Phone devices.
The Nokia-Microsoft deal was the talk of the Mobile World Congress conference in February, with big names like Intel and Google expressing their disappointment. Just one year before, Intel had teamed up with Nokia to announced the MeeGo platform, while Google's Eric Schmidt said his company had tried to persuade Nokia to go with Android over Windows Phone, but to no avail.
Last month, IDC said that Android is poised to become the number one mobile operating system in 2011, while the Nokia-Microsoft deal could propel Windows Phone to the number two position by 2015. For now, however, Windows Phone will likely only capture about 5.5 percent of the market this year, according to IDC.