Nokia, R&D And ROI

Extract from here:

2010 was a hell of a year for Nokia. It barely maintained its position as the largest producer of mobile phones in the world; lost out to Android as the largest smartphone OS; had a mixed reaction to its flagship N8; installed its first non-Finnish CEO; saw its Q4 pre-tax profits fell by 22 percent and today we have learned that the Finnish company has spent almost $4 billion in research and development in 2010.

Research results by Bernstein Research has revealed that in 2010 Nokia’s Devices & Services department spent $3.9 billion on R&D which is around three times the average spent by its rivals such as HTC, RIM, Microsoft and Apple. When you look at the chart (see above) visualising the spending on R&D it becomes clear how much more the Finnish company is spending on new and emerging technology.

It’ll be interesting to see if this mammoth outlay delivers (over time) the required results – global innovation is a tricky business!

Update from Bloomberg Businessweek:

“Microsoft Corp. will pay Nokia Oyj more than $1 billion to promote and develop Windows-based handsets as part of their smartphone software agreement, according to two people with knowledge of the terms.

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, said one of the people, who declined to be identified because the final contract hasn’t yet been signed. The agreement runs for more than five years, the people said.”

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