Though Nokia's CEO had said last month that its recent alliance with Microsoft would be worth billions to the Finnish cellphone maker, he had not divulged any projections from the deal.
However, now, Bloomberg reports that Microsoft will pay Nokia Oyj more than $1 billion to promote and develop Windows-based handsets as part of their smartphone software agreement.
Nokia will pay Microsoft a fee for each copy of Windows used in its phones, costs that will be offset as Nokia curtails its own budget for software research and development, it cited one source as saying. The agreement runs for more than five years, it added.
However, Microsoft and Nokia refused to make any comment.
It was in February that Nokia announced it was teaming up with Microsoft to take on Google and Apple in the smartphone market.
As part of the deal Nokia would use Windows Phone as the software platform for its smartphones as part of new chief executive Stephen Elop's overhaul of the world's biggest cellphone maker.
Microsoft's Windows Phone platform is widely recognized by industry experts as a leading edge technology but has not yet gained success among consumers.
Nokia has rapidly lost share in the higher-margin smartphone market to the likes of Apple's iPhone, and products based on Google's Android platform claimed the top spot from the company last quarter.
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