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$1bn, the price of Nokia killing its cross-platform strategy

Nokia has killed its once vaunted multiplatform software strategy with the sale of its Qt application framework

By PETER WHITE

Published: 10 March, 2011

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Nokia has killed its once vaunted multiplatform software strategy with the sale of its Qt application framework. Even when the firm agreed to support WP7, it was still talking up Qt and its ability to support multiple OSs, but the sale to Digia indicates the single-mindedness of its new commitment to Windows.

Nokia may still have MeeGo as a fallback option for future devices, but its bid to become a web services player that went beyond single platforms – a hallmark of the strategy of previous CEO Olli-Pekka Kallasvuo – is truly over. Qt was the basis of that plan, and when it was acquired with Trolltech, looked like the most important software purchase Nokia had ever made, not excluding Navteq. But while Navteq was a key attraction of the Nokia alliance for Microsoft, Qt was apparently a distraction from a future based around Silverlight in the short term, and HTML5 after that.

In fact, Nokia is only selling the commercial licensing and services aspects of the Qt business to Digia, but it is distancing itself from the product itself too. It is moving the platform and its development to an open governance model and this may well remain closely related to its residual MeeGo efforts, which are also being treated as an arms-length open source project. These may come into play for new device formats in future, and as a bargaining chip should Microsoft get too demanding. Qt also remains the development framework for Symbian, which will play a diminishing but significant part in Nokia’s strategy for some years, especially in emerging markets. Nokia says Qt will be part of its "future disruptions strategy”, an initiative to develop experimental and next generation gadgets.

Digia plans to push Qt on desktops and also for embedded systems such as the auto market – where Trolltech founder Benoit Schillings, now at Myriad, believes the future lies for MeeGo and Qt. As part of the deal, 3,500 desktop and embedded Qt customers will be transferred to Digia and the firm will also take on 19 Nokia staff.

Meanwhile, Bloomberg has revealed the $1bn with which Microsoft sweetened the deal for Nokia. The CEOs of Intel and Google, both of whom had their nose put out of joint by the WP7 decision, had hinted at the “huge sums” that Microsoft had put into winning Nokia. The new reports say the Windows giant will pay its new friend more than $1bn to promote and develop WP7 handsets. Nokia will pay Microsoft a per-handset licensing fee for the use of WP7, but it will also receive cash from its partner to subsidize its R&D activities, over a period of “more than five years”.

Microsoft has engaged in risk sharing agreements like this before, notably with it far-reaching – but now apparently near-dormant – device deal with LG, announced in 2009. But this one goes a lot further and indicates the importance to Nokia of reducing cost as it faces the huge open community and pooled OEM budgets of Android ‘s supporters. It also shows how Microsoft regards this Nokia deal as its last real chance to make an impact in handsets – one worth paying $1bn for, especially as the firm also gains access to Nokia’s vast patent portfolio and, one of the jewels in the deal, the Navteq mapping platform, now to be part of Windows. Nokia will get a revenue share from both these activities, though it is not clear whether that is included in the $1bn estimate.

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