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.