Microsoft Pays Billions to Push Its Mobile OS

It aims to grow WP7's market share through a deal with top phone vendor Nokia.

Microsoft Corp.'s flagging Windows Phone 7 software got a boost this month when Nokia Corp. agreed -- in return for billions of dollars -- to run the operating system on its next generation of mobile phones.

Nokia CEO Stephen Elop said the phone maker selected WP7 over Google Inc.'s popular Android open-source software to ensure "a three-horse race" between Windows Phone, Android and Apple Inc.'s iOS in the mobile operating system market.

Observers had speculated that the deal would cost Microsoft millions or tens of millions of dollars. But the figure may be 10 times higher: Elop said at the Mobile World Congress (MWC) in Barcelona last week that "the value transferred to Nokia is measured in B's, not M's."

Elop said Nokia plans to continue to support the large base of developers who build apps for its Symbian operating system, but he added that it will eventually phase out Symbian and create a smooth path to Windows Phone.

The first Windows Phone device from Nokia is expected to ship later this year, when a new version of Microsoft's operating system is due. Microsoft CEO Steve Ballmer said at MWC that the WP7 update will include Internet Explorer 9 and will support Twitter, multitasking with additional third-party apps and SkyDrive cloud computing functions.

Elop also told reporters at MWC that, contrary to widespread rumors, "there was no discussion" of Microsoft acquiring Nokia during the negotiations between the two companies.

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