Microsoft to use Opera browser on low, mid-market phones

  Opera said Microsoft would automatically put the Opera Mini browser, known for its ability to compress content and save on data charges, on its feature phones — mobile phones with more limited capacity than so-called smartphones

Reuters/Oslo

  Microsoft has agreed to install Opera Software’s Internet browser on low and mid-market mobile phones it inherited from Nokia, potentially putting Opera Mini on another 100mn phones year.

The deal comes after Microsoft completed its $7.5bn takeover of Nokia’s handset business in April and announced it would cut 18,000 jobs as part of its efforts to halve the size of the Nokia phone business. “This is a great agreement for us, and something we have been dreaming of for 10 years and now it’s finally happening,” Opera chief executive Lars Boilesen said.

Opera, which also generates revenues from digital advertising platforms, said the deal would be profitable from day one. It declined to estimate the expected volume, but a source close to the agreement said Opera Mini could now be installed on an additional 100mn handsets a year.

Opera also raised its full-year guidance, predicting earnings before interest, taxes, depreciation and amortisation would be $117mn to $124mn, up from previous guidance of $110-120mn, while revenues would come in at $480-500mn versus a previous forecast of $435-460mn.

Norway’s Opera said Microsoft would automatically put the Opera Mini browser, known for its ability to compress content and save on data charges, on its feature phones — mobile phones with more limited capacity than so-called smartphones.

Opera said Microsoft was essentially outsourcing web browser development for all phones that do not use its Windows operating system. Opera Mini will also be pushed out to existing phones to encourage uses to upgrade from the Xpress browser.

“The deal involves feature phones and the Asha product line, which is good, but there is a potential kicker here if they manage to convert existing users, like they say they will,” Christer Roth an analyst at DNB Markets said.

“If they succeed then it would give them a solid user base growth, which they indirectly can monetise,” Roth said. “The most lucrative part would be if they managed to take over the browser part of all windows phones.”

The Opera Mini browser is installed on 250mn phones, primarily in emerging markets. It can compress data by as much as 90%, saving operators bandwidth and is compatible with nearly all Internet-capable devices.

Rich Bernardo, head of legacy business, phones, at Microsoft said the deal would allow the company to provide continuity of service as it moves from the Xpress browser to Opera Mini.