Nokia is Hooked on Windows Phone, Now Has to Pay for it
When Microsoft and Nokia married at the temple of Windows Phone last year, the dowry was nothing if not complicated. Nokia had to pay a minimum amount in software royalties to Microsoft regardless of how many Lumia smartphones it sold, but the financial hit was more than cancelled out by “platform support payments” coming back the other way. At some point, however, the net flow of cash was always bound to switch direction, as the cost of the software royalties exceeded Redmond’s $250 million quarterly support payments and the whole thing started to mature as something closer to a zero-sum transaction. According to Nokia’s latest financial report, that turning point has now been reached and the company’s accountants will have to start writing a minus where there used to be a plus. That makes it doubly fortunate that Nokia has just returned to profitability — at least if future quarters prove it really has.