Two Important Things Microsoft Gets From Nokia Besides Smartphones
Rick Wilking/ Reuters
In addition to shoring up Microsoft's most important smartphone partner, it places into Microsoft's hands two important technologies besides smartphones:
1.
Nokia didn't just throw this tech to the agreement. Microsoft agreed to make extra payments over four years for it.
GPS devices collect location data. They know where all of the cars and devices are. Microsoft plans to use this data with Bing and make it available to software developers via its cloud service, Windows Azure.
Now add this into the rumored investment Microsoft may make in Foursquare and you can see Microsoft's plans shape up.
Microsoft "needs an effective alternative to Google," it said in a PowerPoint presentation shared with Business Insider. There needs to be "more than one digital map of the world."
Microsoft also sees this as a chance to bring GPS tech or data to other apps like Office, Skype and Xbox Live.
2. A massive collection of intellectual property from Nokia. Remember a big chunk of the money Microsoft is paying to Nokia is to license Nokia's patents for at least 10 years: That accounts for €1.65 billion or about $2.2 billion of this $7.2 billion agreement.
Microsoft is gaining access to over 30,000 patents from "one of the two most valuable portfolios" in the wireless industry, Microsoft says. The other important patent portfolio Microsoft refers to belongs to chip maker Qualcomm.
For instance, Motorola Mobility, now owned by Google, pays fees to Nokia to license wireless patents. It will now have to pay those fees to Microsoft.
This is significant for Microsoft because a good chunk of its mobile revenue is actually coming from the patents it collects, mostly from Android device makers, instead of the phones it sells.
The more patents it owns, the more it can go after Android (and maybe Apple), and the more it makes from other companies' smartphones.
None of this solves Microsoft's ultimate problem: making consumers and businesses want Windows Phones. But it helps Microsoft generate more revenue from mobile while it tries to figure that out.
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