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."
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.