Microsoft to pay Samsung and Sony to make WP8 phones

Before Microsoft bought out Nokia's phone division, the software giant was subsidizing the phone maker to the tune of $1 billion a year. That was a big incentive for Nokia to go with Windows Phone over other alternatives.

The company may be offering the same deal to other companies as well – at least according to Eldar Murtazin, whose prediction accuracy has gone down from its heyday.

Microsoft going to pay to each company for creating one wp8 model. No matter how they call this money, its not a real business for MS

— Eldar Murtazin (@eldarmurtazin) January 15, 2014

Anyway, apparently Samsung has taken the deal and will be receiving $1.2 billion to make Windows Phone 8 handsets. There seems to have been some negotiations since the number was $1 billion in mid-December.

Windows phone 8 in 2014 - Samsung 1.2 bln USD, Sony 0.5 bln, Huawei 0.6 bln, others - 0.3 bln. Thats "support" from MS to develop one (1!)hs

— Eldar Murtazin (@eldarmurtazin) January 15, 2014

Samsung isn't alone in this – we've heard that Microsoft has been courting Sony to make a WP handset too and it the wooing was reportedly in the form of $500 million. Even Huawei is getting a cut, more than Sony actually - $600 million. Other companies, which haven't been named, will reportedly be receiving lower sums, $300 million.

For instance, Sony with 0.5 bln from Microsoft already profitable in 2014, will meat internal goals in terms of money around September :)

— Eldar Murtazin (@eldarmurtazin) January 15, 2014

Surprisingly, HTC is getting squat or has managed to keep it a secret. The Taiwanese maker is in the red and can use a cash infusion, but seems to have lost interest in Windows Phone and hasn’t produced a new handset since the 8X and 8S duo. Speaking of which, Samsung isn't exactly piling on new models either.

And that's a problem – now that Microsoft owns the Lumia line, it also owns around 90% of the market. While the company isn't afraid to produce its own hardware (like the Surface tablets), it prefers to license out software for other companies' devices (the highly successful model it uses for Windows).

Will those rumors pan out? Sony could use the cash infusion as some core businesses aren’t doing too hot (cameras, TVs, etc.), Huawei could use the legitimacy (the brand name isn't popular in the west) and Samsung is on the hook for making Windows Phone devices anyway (a legal agreement).

Still, take it with a grain of salt until the companies' press releases officially have a line stating payment from Microsoft.

Oh, and don't forget the sweet irony that Nokia may be making an Android-powered phone. Speaking of Android, Microsoft is making a pretty penny on licensing deals over Android so this might just be reinvesting the money into its own platform.

Source | Via