As Lumia sales have declined to build up adequately drop the quarterly licensing payment that Nokia is forced to pay for Microsoft, Nokia’s net costs for selecting Windows Phone as its smartphone operating system support are prepare to burst as Microsoft platform support payments to Nokia begin to fail. The said details is elaborated in the firm’s fourth quarter and full 2012 financial year statement.
In July, the high cost of Nokia’s Windows Phone license was particularly exposed. By utilizing the Windows Phone operating system, Nokia is required to pay a flat-fee of almost $250 million or equivalent to £160 million per quarter in licensing payments to Microsoft. It’s associated with the cost of at least $60 or £40 each phone, this was six months ago.
Nokia inherit the same amount from Microsoft in platform support payments that hides the help that Nokia has given in establishing a Windows Phone operating system along with the licensing of Nokia intellectual premises. They still agree to an acceptable amount of $40 or £26 per mobile phone, while the per unit cost of the Windows Phone license has abstained as sales have augmented.
To take on over some low-cost Android phones, the per unit cost of the license makes it daring for Nokia to offer budget Windows Phone devices. It will interrupt the production of Symbian-based smartphones such as the PureView 808 and the N9. N9 is the only phone that Nokia created based on the Meego Linux operating system that has been in the emerging market while PureView 808 that has a 41 megapixel camera will be the final Symbian phone developed.
Hence, Nokia lacks accurate smartphone options in developing markets that loyal customers of its feature mobile phones can exchange to. Alternatively, it has a line up of Asha phones, which is based on the developing S40 operating system but S40 is not applicable for multi-tasking and it is not a real smartphone operating system. Since Stephen Elop selected as the new CEO, Nokia’s fourth quarter impacts sustained the firm’s long-running downfall.
In the same quarter in 2011, the sales were down by 19.6 percent dropping from €10 billion to €8.04 billion but because of the lower costs in the quarter, the firm insisted an operating acquisition of €439 million over the operating loss a year earlier of about €954 million. After the firm concluded two years ago to terminate the operating system, smartphone sales continue to drop off because of the breakdown of sales of Symbian-based phones.
Three-quarters of Nokia’s smartphone purchase were either no longer in use Windows Phone 7 or Symbian phones that Nokia was strained to discount to clear next to the release of Windows Phone 8. However, in the quarter only about 2 million flagship Windows Phone 8-based Lumias were sold in the market. But on the brighter side alternatively in an obscure set of results for Nokia is the recovery of Nokia Siemens Networks that contributes almost €1.3 billion to Nokia’s net cash spot.
REFERENCES:
http://www.computing.co.uk/ctg/news/2238927/nokias-windows-phone-licence-costs-set-to-soar-as-quarterly-sales-disappoint/page/1
http://www.techinvestornews.com/Mobile/Latest-Mobile-News/nokias-windows-phone-licence-costs-set-to-soar-as-quarterly-sales-disappoin
http://localuknews.co.uk/article/nokias-windows-phone-licence-costs-set-to-soar-as-quarterly-sales-disappoint
http://memphis.anytowngazette.com/View.aspx?linkid=31006620
http://www.onenewspage.co.uk/n/Computer+Industry/74vnpjpti/Nokia-Windows-Phone-licence-costs-set-to.htm
