Microsoft to pay $1 billion in Nokia deal

Microsoft looks set to pay Nokia over $1 billion (619.6 million) as part of the deal between the two tech giants.

Few financial details emerged last month when Steve Ballmer and Stephen Elop announced the partnership.

Now, it appears Microsoft will be paying a hefty sum, which will towards funding the promotion and development of Windows-based handsets, a Bloomberg report indicated.

Citing two people with knowledge of the terms, the report claimed Nokia will pay Microsoft a fee for every copy of Windows used in the Finnish manufacturer's devices.

These costs will be offset as Nokia lowers investment in its own software research and development.

Neither Nokia or Microsoft will be pleased to see Comscore figures, showing the Redmond giant's share of smartphone subscribers falling by 1.7 per cent in the US.

Google came out on top as it saw the uptake of its Android mobile operating system skyrocket in recent months.

Shipments of Android-based phones rose by more than 1,500 per cent in Western Europe year-over-year, IDC research showed this week.

Some 7.9 million handsets were shipped in the fourth quarter of 2010 up from 470,000 in the same period in 2009.

Francisco Jeronimo, European mobile devices research manager at IDC, predicted the Nokia and Microsoft alliance "will create opportunities for other operating systems to exploit the transition period between Symbian and Windows Phone 7."