Though it was initially announced back in February, the 5-year, $1 billion agreement between Microsoft and Nokia became official today. This deal is eventually expected to have a major effect on the smartphone industry.
Per the agreement, Nokia's future smartphones will run Microsoft's Windows Phone 7 operating system. This will, of course, be a switch for Nokia, which has been using the Symbian OS on its devices for some time now.
Because it is licensing Windows Phone, Nokia will have to pay Microsoft for each copy of the operating system it uses, but the compensation that the Finnish phone company is receiving from Microsoft is more than enough for Nokia to create and advertise new models running WP7.
Beyond that, the finer details of the agreement between the two companies remain a mystery, and the first wave of devices born from this partnership -- consisting of six different smartphones -- isn't expected until sometime next year. It has been rumored, however, that the first two Windows Phone 7 devices from Nokia could be modified versions of the X7 and N8, renamed as the W7 and the W8. In an attempt to get its initial WP7 models out the door in speedier fashion, Nokia intends to take these phones that were originally designed for the Symbian OS and instead ship them with Microsoft's operating system.
Some industry analysts are bullish on the Microsoft/Nokia agreement. Both IDC and Gartner have released predictions that these two companies will grow shipments of Windows Phone to the point where it is outselling Apple's iPhone.
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