Contract Grammar

To build a new global mobile

Strategic
Routines Centralized Decentralized ecosystem
for
smartphones
Coordination
(A1)
(A2)
(A3)
through the Windows Phone
platform
Clearly defined roles, Nokia
would adopt Microsofts Windows
Phone operating system as the
companys
primary
Technical Organizational Routines Centralized Decentralized handset
smartphone
platform,
while
Governance Coordination
(B1)
(B2)
(B3)
Microsoft would provide Nokia
financial, technical and marketing
support to Nokia to help build up
the Windows Phone ecosystem

Both operated in their own

Operational Routines Centralized Decentralized domain separately and the
Coordination
(C1)
(C2)
(C3)
contract clearly stated all
timelines

Contract Grammar Contd..

No credible Unilateral
Credible
commitment Application
Commitments
(D1)
(D2)
Enforcement
Mode
Supervision
Mechanism

Self
enforced
(E1)

Remuneration Remuneration Customized

System
Basis (F1)
& risk
sharing
Duration

Contract
Duration

Spot
Contract
(G1)

Nokias entire future was at stake

Bilateral
in this deal whereas for Microsoft
Third Party
Application
phone made up around 10% of
(E4)
(D3)
profits, both parties were free to
work on other options

External nonOne of the co- Intensity of

specialized
Both firms had separate internal
contractors
use basis
arbitrator
teams to manage the product
(E3)
(F4)
(E2)

Collective
Basis (F2)

Flat Rate
Basis (F3)

Short-term
Long term
contract (G2) contract (G3)

Contract grammar A1B1C1D2E1F3G2

Nokia has to pay quarterly software

royalty commitment payments to
Microsoft based on the number of
Nokia Windows Phone devices
sold, with a yearly minimum
payment guaranteed.
5 year contract

References
http://www.brighthand.com/news/microsoft
-and-nokia-working-on-a-5-year-1-billion
-contract
/
http://timesofindia.indiatimes.com/tech/
slideshow/nokiamicrosoftdeal/7-Things-to
-know-about-Nokia-Microsoft-deal/itslide
showviewall/7482352.cms
https://news.microsoft.com/2011/02/10/n
okia-and-microsoft-announce-plans-for-a
-broad-strategic-partnership-to-build-a
-new-global-mobile-ecosystem/#sm.0000k0
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