Nokia and Microsoft sign definitive agreement a...
Key contributions to new global mobile ecosystem agreed and significant progress
made on engineering of new products
Nokia Corporation
Stock exchange release
April 21, 2011 at 13.10 (CET +1)
Espoo, Finland and Redmond, US - Nokia (NYSE: NOK) and Microsoft (NASDAQ: MSFT)
today announced the signing of a definitive agreement on a partnership that will
result in a new global mobile ecosystem, utilizing the very complementary assets
of both companies. Completed ahead of schedule, the definitive agreement is
consistent with the joint announcement made on February 11.
In addition to agreeing to the terms of their partnership, including joint
contributions to the development of the new ecosystem, Nokia and Microsoft also
announced significant progress on the development of the first Nokia products
incorporating Windows Phone. With hundreds of personnel already engaged on joint
engineering efforts, the companies are collaborating on a portfolio of new Nokia
devices. Nokia has also started porting key applications and services to operate
on Windows Phone and joint outreach has begun to third party application
developers.
"At the highest level, we have entered into a win-win partnership," said Stephen
Elop, President and CEO of Nokia Corporation. "It is the complementary nature of
our assets, and the overall competitiveness of that combined offering, that is
the foundation of our relationship."
"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."
The relationship is structured around four broad areas:
1. A combination of complementary assets, which make the partnership truly
unique, including:
- Nokia to deliver mapping, navigation, and certain location-based services to
the Windows Phone ecosystem. Nokia will build innovation on top of the Windows
Phone platform in areas such as imaging, while contributing expertise on
hardware design and language support, and helping to drive the development of
the Windows Phone platform. Microsoft will provide Bing search services across
the Nokia device portfolio as well as contributing strength in productivity,
advertising, gaming, social media and a variety of other services. The
combination of navigation with advertising and search will enable better
monetization of Nokia's navigation assets and completely new forms of
advertising revenue.
- Joint developer outreach and application sourcing, to support the creation of
new local and global applications, including making Windows Phone developer
registration free for all Nokia developers.
- Opening a new Nokia-branded global application store that leverages the
Windows Marketplace infrastructure. Developers will be able to publish and
distribute applications through a single developer portal to hundreds of
millions of consumers that use Windows Phone, Symbian and Series 40 devices.
- Contribution of Nokia's expertise in operator billing to ensure participants
in the Windows Phone ecosystem can take advantage of Nokia's billing agreements
with 112 operators in 36 markets.
2. Microsoft will receive a running royalty from Nokia for the Windows Phone
platform, starting when the first Nokia products incorporating Windows Phone
ship. The royalty payments are competitive and reflect the large volumes that
Nokia expects to ship, as well as a variety of other considerations related to
engineering work to which both companies are committed. Microsoft delivering the
Windows Phone platform to Nokia will enable Nokia to significantly reduce
operating expenses.
3. In recognition of the unique nature of Nokia's agreement with Microsoft and
the contributions that Nokia is providing, Nokia will receive payments measured
in the billions of dollars.
4. An agreement that recognizes the value of intellectual property and puts in
place mechanisms for exchanging rights to intellectual property. Nokia will
receive substantial payments under the agreement.
With the definitive agreement now signed, both companies will begin engaging
with operators, developers and other partners to help the industry understand
the benefits of joining the new ecosystem. At the same time, work will continue
on developing Nokia products on the Windows Phone platform, with the aim of
securing volume device shipments in 2012. The scale of both companies' mutual
commitment is significant and is in keeping with the intention to build a new
ecosystem based on this long-term, strategic partnership.
About Nokia
Nokia is committed to connecting people to what matters to them by combining
advanced mobile technology with personalized services. More than 1.3 billion
people connect to one another with a Nokia, from our most affordable voice-
optimized mobile phones to advanced Internet-connected smartphones sold in
virtually every market in the world. Through Ovi (www.ovi.com), people also
enjoy access to maps and navigation on mobile, a rapidly expanding applications
store, a growing catalog of digital music, free email and more. Nokia's NAVTEQ
is a leader in comprehensive digital mapping and navigation services, and Nokia
Siemens Networks is one of the leading providers of telecommunications
infrastructure hardware, software and professional services globally.
FORWARD-LOOKING STATEMENTS
It should be noted that certain statements herein which are not historical facts
are forward-looking statements, including, without limitation, those regarding:
A) the expected plans and benefits of our strategic partnership with Microsoft
to combine complementary assets and expertise to form a global mobile ecosystem
and to adopt Windows Phone as our primary smartphone platform; B) the timing and
expected benefits of our new strategy, including expected operational and
financial benefits and targets as well as changes in leadership and operational
structure; C) the timing of the deliveries of our products and services; D) our
ability to innovate, develop, execute and commercialize new technologies,
products and services; E) expectations regarding market developments and
structural changes; F) expectations and targets regarding our industry volumes,
market share, prices, net sales and margins of products and services; G)
expectations and targets regarding our operational priorities and results of
operations; H) expectations and targets regarding collaboration and partnering
arrangements; I) the outcome of pending and threatened litigation; J)
expectations regarding the successful completion of acquisitions or
restructurings on a timely basis and our ability to achieve the financial and
operational targets set in connection with any such acquisition or
restructuring; and K) statements preceded by "believe," "expect," "anticipate,"
"foresee," "target," "estimate," "designed," "plans," "will" or similar
expressions. These statements are based on management's best assumptions and
beliefs in light of the information currently available to it. Because they
involve risks and uncertainties, actual results may differ materially from the
results that we currently expect. Factors that could cause these differences
include, but are not limited to: 1) our ability to succeed in creating a
competitive smartphone platform for high-quality differentiated winning
smartphones or in creating new sources of revenue through our partnership with
Microsoft; 2) the expected timing of the planned transition to Windows Phone as
our primary smartphone platform and the introduction of mobile products based on
that platform; 3) our ability to maintain the viability of our current Symbian
smartphone platform during the transition to Windows Phone as our primary
smartphone platform; 4) our ability to realize a return on our investment in
MeeGo and next generation devices, platforms and user experiences; 5) our
ability to build a competitive and profitable global ecosystem of sufficient
scale, attractiveness and value to all participants and to bring winning
smartphones to the market in a timely manner; 6) our ability to produce mobile
phones in a timely and cost efficient manner with differentiated hardware,
localized services and applications; 7) our ability to increase our speed of
innovation, product development and execution to bring new competitive
smartphones and mobile phones to the market in a timely manner; 8) our ability
to retain, motivate, develop and recruit appropriately skilled employees; 9) our
ability to implement our strategies, particularly our new mobile product
strategy; 10) the intensity of competition in the various markets where we do
business and our ability to maintain or improve our market position or respond
successfully to changes in the competitive environment; 11) our ability to
maintain and leverage our traditional strengths in the mobile product market if
we are unable to retain the loyalty of our mobile operator and distributor
customers and consumers as a result of the implementation of our new strategy or
other factors; 12) our success in collaboration and partnering arrangements with
third parties, including Microsoft; 13) the success, financial condition and
performance of our suppliers, collaboration partners and customers; 14) our
ability to source sufficient quantities of fully functional quality components,
subassemblies and software on a timely basis without interruption and on
favorable terms, including the disruption of production and/or deliveries from
any of our suppliers as a result of adverse conditions in the geographic areas
where they are located; 15) our ability to manage efficiently our manufacturing,
service creation, delivery and logistics without interruption; 16) our ability
to ensure the timely delivery of sufficient volumes of products that meet our
and our customers' and consumers' requirements and manage our inventory and
timely adapt our supply to meet changing demands for our products; 17) any
actual or even alleged defects or other quality, safety and security issues in
our products; 18) any actual or alleged loss, improper disclosure or leakage of
any personal or consumer data collected or made available to us or stored in or
through our products; 19) our ability to successfully manage costs, including
our ability to achieve targeted costs reductions and to effectively and timely
execute related restructuring measures, including personnel reductions; 20) our
ability to effectively and smoothly implement the new operational structure for
our devices and services business effective April 1, 2011; 21) the development
of the mobile and fixed communications industry and general economic conditions
globally and regionally; 22) exchange rate fluctuations, including, in
particular, fluctuations between the euro, which is our reporting currency, and
the US dollar, the Japanese yen and the Chinese yuan, as well as certain other
currencies; 23) our ability to protect the technologies, which we or others
develop or that we license, from claims that we have infringed third parties'
intellectual property rights, as well as our unrestricted use on commercially
acceptable terms of certain technologies in our products and services; 24) our
ability to protect numerous Nokia, NAVTEQ and Nokia Siemens Networks patented,
standardized or proprietary technologies from third-party infringement or
actions to invalidate the intellectual property rights of these technologies;
25) the impact of changes in government policies, trade policies, laws or
regulations and economic or political turmoil in countries where our assets are
located and we do business; 26) any disruption to information technology systems
and networks that our operations rely on; 27) unfavorable outcome of
litigations; 28) allegations of possible health risks from electromagnetic
fields generated by base stations and mobile products and lawsuits related to
them, regardless of merit; 29) our ability to achieve targeted costs reductions
and increase profitability in Nokia Siemens Networks and to effectively and
timely execute related restructuring measures; 30) Nokia Siemens Networks'
ability to maintain or improve its market position or respond successfully to
changes in the competitive environment; 31) Nokia Siemens Networks' liquidity
and its ability to meet its working capital requirements; 32) whether Nokia
Siemens Networks' acquisition of the majority of Motorola's wireless network
infrastructure assets will be completed in a timely manner, or at all, and, if
completed, whether Nokia Siemens Networks is able to successfully integrate the
acquired business, cross-sell its existing products and services to customers of
the acquired business and realize the expected synergies and benefits of the
planned acquisition; 33) Nokia Siemens Networks' ability to timely introduce new
products, services, upgrades and technologies; 34) Nokia Siemens Networks'
success in the telecommunications infrastructure services market and Nokia
Siemens Networks' ability to effectively and profitably adapt its business and
operations in a timely manner to the increasingly diverse service needs of its
customers; 35) developments under large, multi-year contracts or in relation to
major customers in the networks infrastructure and related services business;
36) the management of our customer financing exposure, particularly in the
networks infrastructure and related services business; 37) whether ongoing or
any additional governmental investigations into alleged violations of law by
some former employees of Siemens AG may involve and affect the carrier-related
assets and employees transferred by Siemens AG to Nokia Siemens Networks; 38)
any impairment of Nokia Siemens Networks customer relationships resulting from
ongoing or any additional governmental investigations involving the Siemens
carrier-related operations transferred to Nokia Siemens Networks; as well as the
risk factors specified on pages 12-39 of Nokia's annual report Form 20-F for the
year ended December 31, 2010 under Item 3D. "Risk Factors." Other unknown or
unpredictable factors or underlying assumptions subsequently proving to be
incorrect could cause actual results to differ materially from those in the
forward-looking statements. Nokia does not undertake any obligation to publicly
update or revise forward-looking statements, whether as a result of new
information, future events or otherwise, except to the extent legally required.
Media Enquiries:
Nokia
Communications
Tel. +358 7180 34900
Email: press.services@nokia.com
www.nokia.com
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: NOKIA via Thomson Reuters ONE
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