Nokia completes Microsoft deal, reports 1.4 profit decline

Finnish manufacturer says first Nokia handsets running Windows Phone are a step closer following early agreement sign off

Nokia and Microsoft say they have signed a “definitive agreement on a partnership” meaning that the first Nokia phones incorporating Microsoft’s Windows Phone platform are a step closer to production.

The definitive agreement has been completed ahead of schedule and is consistent with the joint announcement made on February 11 between the two companies.

In a statement confirming the agreement, Nokia said “significant progress” had been made on the development of the first Nokia Windows Phone.

“Hundreds of personnel [are] already engaged on joint engineering efforts, the companies are collaborating on a portfolio of new Nokia devices,” the statement said.

Nokia has also started porting key applications and services to operate on Windows Phone and joint outreach has begun to third party application developers, it said.

Speaking about the announcement Nokia president and chief executive Stephen Elop (pictured) said: “At the highest level, we have entered into a win-win partnership.

“It is the complementary nature of our assets, and the overall competitiveness of that combined offering, that is the foundation of our relationship.”

Microsoft chief executive Steve Ballmer added: “Our agreement is good for the industry. Together, Nokia and Microsoft will innovate with greater speed, and provide enhanced opportunities for consumers and our partners to share in the success of our ecosystem.”

The announcement came as as Nokia reported a 1.4 percent decline in its first quarter profits.

The manufacturer said income was €344 million compared to €349 million in the year ago period.

Sales however rose by 9.2 percent to €10.4 billion for the quarter, but Elop warned of a “challenging” second quarter.

Elop said about the results: “Following a solid first quarter, we expect a more challenging second quarter. However, we are encouraged by our roadmap of mobile phones and Symbian smartphones, which we will ship through the balance of the year.

We are fully focused on delivering the needed accountability, speed and results to positively drive our future financial performance.”