Should Microsoft Charge For Windows Phone 7 Series?

Microsoft showed off its new mobile platform called Windows Phone 7 Series earlier this week. While the new mobile OS promises big changes in comparison to previous generations of Windows Mobile, one thing remains the same: Microsoft still intends to charge manufacturers to license the software. Whether or not this is a wise decision will remain to be seen, but there are compelling arguments for both sides.

When Microsoft CEO Steve Ballmer said Microsoft would continue with its current Windows Mobile business model, he defended the stance saying, "I think there's something clean and simple and easy to understand about our model….We build something, we sell that thing." He added, "I think it's not only in our best interests, but it's ... a simple model that's easy for developers, handset manufacturers, and our operator partners to deal with, to understand, and to build from."

Considering Android and Symbian are open source platforms and BlackBerry and the iPhone software is not available to third parties, Windows Phone 7 Series will be the only major smartphone platform on the market that will be available on a paid basis. For manufacturers, a free platform—especially one that users seem to like—is definitely more attractive than a paid platform, even if the license fee for each phone is small. Many believe Windows Mobile does not account for a substantial amount of revenue for the company and therefore think that forgoing the license fee could help make Windows Phone 7 Series more competitive.

On the flip side, Windows Phone 7 Series will offer a unique user interface along with built-in applications that can't be found on other platforms. In the past, many manufacturers have been willing to pay license fees for Windows Mobile, so it seems reasonable to think they'll be willing to pay for future iterations of the mobile OS as well. Given that a number of major manufacturers are already on board with the new platform and working on devices that will ship later this year, this seems to be true.

Windows Phone 7 Series could also offer manufacturers a few benefits they wouldn't get with other platforms. For example, manufacturers may be able to cut costs with Windows Phone 7 Series due in part to the fact that the OS will not support custom front-ends as it has in the past. This will save manufacturers time and money in developing a new front-end for the phone. Additionally, the new Internet Explorer browser may actually be good enough to allow manufacturers to forego licensing and customization of a third-party browser such as Opera, thereby saving even more money.

At the end of the day, it's Microsoft's call as to whether or not to charge for its new mobile platform. The company has spoken, and even if the revenue generated by licensing fees is small by comparison to Microsoft's overall revenue, it's still money in the software giant's pocket. For consumers, the estimated $8 to $20 license fee is not likely to make a huge difference in overall hardware pricing.

Via:  Yahoo!
3vi1 4 years ago

>> Windows Mobile does not account for a substantial amount of revenue for the company

Okay, I'm going to reveal a secret. This might be shocking, but: Microsoft is not in the business of selling Windows to consumers.

MS sells most copies of Windows with new PCs for $25 to OEMs. Still, Windows is not their core product; their core product is the Windows API.

Back when Microsoft was *really* smart (i.e. when Bill was running the show), MS even gave up free copies to piracy just to increase marketshare against would-be competitors. The genius is that you get people locked into your API and collect the money from people building PCs, they must license it or get sued . Who cares about the relatively minor number of people building their own PCs - you can use TPM to lock them out completely at a later date.

Giving away Windows Mobile would be the *perfect* strategy for them now, as long as they make the licensing so that they can charge carriers $5 a phone for later versions... the second they become a monopoly in that market. That shouldn't take long, with their acquisitions of Yahoo and "original" web services all slowly but surely locking everything down to the Windows API.

And no, it's only paranoia if it's not true. :)

kid007 4 years ago

I will love to see a BSOD in the windows phone 7, that would be hillarious...

Dude what happen, did your carrier dropped the call? nah bro my cell phone got the BSOD... to be continued!

M-ManLA 4 years ago

I don't even think at $20 anyone will cry for spilled milk. Look at how much the original iPhone cost vs actual cost after parts and labor. And they are making bookoo money from that.

rapid1 4 years ago

No I agree with 3vi1 that was the genius of Bill Gates. Yes there were other things, but the main thing was it locked everyone, or at least a very large percentage in. Then as anyone who does anything which requires any kind of paperwork, or presentations, or even spreadsheets or numbers work knows Office is required. Yes you can use other things, but the largest number of customers and individuals won't be able to see it if it is not in office.

Office and various applications is therefore where they make there money. Drooping Windows phones on the providers for 5-15 dollars does many things for Microsoft. First locks in the API as well as the application which predominately use this API, and will not work with anything else. So they just like Windows would be selling for the future premium, which I can almost promise you they will make mad money on, which is much like the iPhone if you look at it.

What is Apples most used product secondary devices (specifically the iPhone and iTunes player's as well as soon to be seen the pad), there PC's cover a handful of the actual market. Therefore they make there money with nickels and dimes (they just had a contest for the 10 millionth song downloaded so how much have they made), not to mention the amounts they made of their devices.

Yes ther PC business is there but even 2 grand time 5-7% (depending on who you believe) of the market is nothing. There is one thing worth more than any of this though recognition. Which is where the Apple market and M$ strategy differs. Windows is already the worlds default, there future just relies on digging further in. Which is exactly what this phone does for them.

So they could give it away for free, in 10 years not only will most people be using PC's at work and home, they will also have it in there pocket 24/7/365.

Inspector 4 years ago

Wow never knew bill gates was in to piracy :D lol.
Giving it for free is the wise decision and i would loive to have my pc in my pockets 24/7/365

realneil 4 years ago

Microsoft does not do 'FREE'.

They never will. They SHOULD have with Win-7 to those of us that paid for nasty-ass Vista, but they failed to do the right thing then, so they won't do it now.

They want your money, nothing else.

rapid1 4 years ago

The only thing you forgot realneil is your money and for you to follow them like lost puppies which most of the world does, just ask 3vi1!

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