Nokia will pay more than $40 per WP license in Q1 2013, meaning that Nokia WP royalties will be bigger than current Microsoft platform payments

In Q4 of 2012, Nokia has managed to make profit of $ 584.7 million. $334 million of operating profit from the property are Nokia Siemens Networks, while the sale of mobile devices counted for $ 367 million, from which 2.2 million Symbian and 4.4 million Lumia smartphones, achieved thanks to the success of smartphones like the Lumia 920 due to higher profit margin.
Nokia announced that the relationship between the subsidies received quarterly by Microsoft and royalties to be paid for the marketing of the Nokia Lumia smartphones begins to show a minus sign. The full amount of the subsidies, then , will not be able to cover the total amount of royalty payments to Microsoft.

It should call the SEC report in March 2012, where it was described in a comprehensive manner the relationship between subsidies and royalties. In summary, it means:

• Microsoft makes quarterly $ 250 million to Nokia to promote the spread of the WP platform
• Nokia is obliged to pay a minimum amount of royalties to Microsoft
• The amount of the royalty is proportional to the amount of the delivered devices

In the initial phase of the Nokia Lumia smartphone marketing, the agreement with Microsoft was beneficial to Nokia who has paid the amount of the royalty has been covered over and grants quarterly.

The official news on today from Nokia is that the balance of payments begins to turn from Microsoft. coming months, the Finnish manufacturer will be required to pay license fees to Microsoft for its Mobile OS, no longer covered by the grants:

"The total amount of the minimum software royalty payments are expected commitment to Exceed the total amount of the platform support payments"

It is not yet possible to establish exactly the royalty amount, but we can make estimates based on this facts:

• Microsoft pays $ 250 million royalty to Nokia every quarter
• Nokia announced that it had reached a point beyond which the royalty subsidies (not less than $ 250 million)
• Assuming that Nokia sells in the first quarter of '13 around 6 million Lumia smartphones, for each unit should pay royalty of $ 41 (if the number should reach 10 million, the royalty would amount to $ 25)

To remain competitive, from this point, Nokia needs to manage a significant increase in sales volumes of its Lumia smartphones.

Via