Photo: Rick Wilking/ Reuters
Steve Ballmer publicly insists that Microsoft is not about to launch its own smartphone.But even Nokia, the company’s biggest Windows Phone partner, doesn’t really believe him.
The company warned investors in a document filed with the SEC last week that it fears a Microsoft smartphone. It said:
“We may face increased competition from other manufacturers, including Microsoft, who already produce or may produce competing Windows Phone based products.”
It also warned that Nokia’s decision to go with Microsoft may have left it without backup options:
“In choosing to adopt Windows Phone as our primary smartphone platform, we may forgo more competitive alternatives achieving greater and faster acceptance in the smartphone market. If the benefits of the Microsoft partnership do not materialise as expected, more competitive alternatives may not be available to us in a timely manner, or at all.”
Nokia actually expects to owe Microsoft money on the deal going forward. Microsoft pays Nokia $1 billion a year to help support its use of Windows Phone. Nokia in turn pays Microsoft a royalty on Windows Phone licenses.
Nokia says that it will eventually owe Microsoft $651 million over the life of the agreement—but not this year, when it says Microsoft will still end up paying Nokia.
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