Nokia in Windows Phone 8 carrier revenue sharing talks say insiders

Jul 23, 2012
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Nokia is considering inking exclusivity deals with European operators for Windows Phone 8 smartphones, promising a financial stake in the success of the next-gen handsets, in an attempt to boost its profile. Partnerships with specific carriers in European countries would be paired with a promised share of the sales proceeds, a source tells the Financial Times, to encourage in-store promotion. The whispers don't come as a huge surprise, however; CEO Stephen Elop said in the aftermath of the company's last quarter financial results that Nokia would trim its European carriers to mimic the deal with AT&T in the US.

Nokia has already begun talks with potential carrier partners, the insiders claim, with France Telecom named but apparently not yet inking a deal. Negotiations are described as "exploratory" and potentially unfounded, and there's the possibility of a more broad-ranging deal with T-Mobile's owner Deutsche Telekom that could see handsets crop up on Everything Everywhere in the UK too.

The move would be a considerable departure from Nokia's sales strategy to-date, including its Windows Phone 7 Lumia handsets, in Europe. Nokia has traditionally pushed for the broadest possible availability, relying on saturation to boost demand. However, according to Elop, the complete opposite approach undertaken in the US - pairing up with AT&T on the Lumia 900 for a concerted and focused push into a market dominated by iPhone and Android - has been more successful.

Exactly by what metric that success is measured is unclear, though it's presumably in bang-for-buck terms. Actual sales of Nokia devices in North America totaled just 600,000, dwarfed by sales in other regions, including Europe. However, it's not clear how much Nokia (and Microsoft) spent in promotion per handset sale across regions.

The goal, it's believed, is to encourage carriers to push Windows Phone devices through in-store promotions, retail staff  training and advertising, by giving them a greater-than-average kick back based on the platform's success. In contrast, Apple is believed to be relatively miserly with its deals with carriers, relying on the iPhone's existing allure for sales, while the market for Android devices is growing increasingly saturated.


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