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Microsoft to Charge for Windows Phone 7

By - Source: Tom's Hardware US | B 38 comments

The best things in life are free, right?

The Web is buzzing about Microsoft's new mobile OS, Windows Phone 7. With a sexy and sleek UI, it seems Microsoft has finally gotten it right and is now able to compete with the bigger players like Apple and Google (Android). However, design aside, it would seem Microsoft's WP7 is at a disadvantage already; it's not free.

The Business Insider reports that, during his keynote speech, Steve Ballmer said Microsoft's business model for Windows Mobile would remain the same. Yes, despite the fact that the company was introducing a completely new operating system that couldn't be more different from Windows Mobile, the company would be sticking with the WinMo business model. This includes imposing a fee upon phone manufacturers who wish to license WP7.

"I think there's something clean and simple and easy to understand about our model," Ballmer said. "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."

You'd assume that choosing to charge would be a deterrent for manufacturers but according to Ballmer, several WP7 partners already have phones in the works; on Monday, Microsoft has said Dell, Garmin-Asus, HTC, HP, LG, Samsung, Sony Ericsson, Toshiba and Qualcomm are all on board. HTC will release its first WP7 phone before the end of the year.

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Top Comments
  • 33 Hide
    Raishi , February 17, 2010 1:55 PM
    Can't say I'm surprised. Microsoft is a standard software company with a standard business model. Steve Ballmer pretty much put it as simply as possible. They make software, they sell software. I don't really see anyone expecting them to give it away for free.

    Google can afford to give much of their software away for free because they have a very different business model; the vast majority of their profits comes from advertising revenue.

    Despite the comments that I'm sure are coming as always, this difference does not make Microsoft evil. It does make Google's software look quite appealing, though.
  • 12 Hide
    mjello , February 17, 2010 2:04 PM
    Well... WinMobile might cost money but at least there is great support incl. in that fee for phone developers. I dont know how the socalled free operating systems work. But no operating system is actually free to develop a phone for. Either you spend time aka. paychecks solving the problems yourself or pay someone to do it.
  • 11 Hide
    back_by_demand , February 17, 2010 2:13 PM
    If I get a new WP7 device next year, I wont really be paying for the OS, it will be included in the monthly rental from the carrier. If I consider the cost vs the phone and service to be value then I wont care if the cost of the OS is included in the rental.
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    Display all 38 comments.
  • 33 Hide
    Raishi , February 17, 2010 1:55 PM
    Can't say I'm surprised. Microsoft is a standard software company with a standard business model. Steve Ballmer pretty much put it as simply as possible. They make software, they sell software. I don't really see anyone expecting them to give it away for free.

    Google can afford to give much of their software away for free because they have a very different business model; the vast majority of their profits comes from advertising revenue.

    Despite the comments that I'm sure are coming as always, this difference does not make Microsoft evil. It does make Google's software look quite appealing, though.
  • 12 Hide
    mjello , February 17, 2010 2:04 PM
    Well... WinMobile might cost money but at least there is great support incl. in that fee for phone developers. I dont know how the socalled free operating systems work. But no operating system is actually free to develop a phone for. Either you spend time aka. paychecks solving the problems yourself or pay someone to do it.
  • 9 Hide
    Honis , February 17, 2010 2:07 PM
    How else would Microsoft expect to make back R&D $ and profit from the product they made?

    Google is the only other company that sells a viable multi-platform smart phone OS and they have an expectation of recovering development costs with the added ad revenue from more people being online.

    By multi-platform I mean allowing manufacturers to install it on just about any device they can fit the OS with minor restrictions. Palm, Apple, and RIM all have multiple phones but very controlled platform releases.
  • -9 Hide
    tayb , February 17, 2010 2:08 PM
    Not going to work very well and they are going to continue to lose market share. Google makes money on advertisements by tying in all of the google products and sell ads on them. The ad revenue is basically pays for the software. Microsoft should consider releasing free versions of the OS that include advertisements and premium versions of the OS that are not free and don't include advertisements. I really think they are at a serious disadvantage if they can't offer some sort of free software especially when the competitor nipping at their heels is completely free.

    Another problem with selling the software is that it's bad business to compete with your customers so that eliminates a Microsoft phone from ever happening. They could easily sell premium versions of WP7, give away ad versions of WP7, and build their own phone using the ad based versions. With no free versions though they would never build their own phone.

    Either way, poor decision from where I'm standing. WP7 looks interesting but I wouldn't be willing to pay an extra $50 to own an exact phone with WP7 over Android.
  • 11 Hide
    back_by_demand , February 17, 2010 2:13 PM
    If I get a new WP7 device next year, I wont really be paying for the OS, it will be included in the monthly rental from the carrier. If I consider the cost vs the phone and service to be value then I wont care if the cost of the OS is included in the rental.
  • 1 Hide
    dman3k , February 17, 2010 2:26 PM
    Ok, Ballmer, we need more details on the development side of things. If developing an WP7 app takes at least a $600 package to do it, what a shame - I hope WP7 fails. If you open WP7 development for free, or a cheap cost one-time fee for a development kit which includes developer key, then I hope WP7 succeeds. Development is the most important aspect of the mobile platforms.
  • 9 Hide
    blackened144 , February 17, 2010 2:28 PM
    Its going to be the exact same as the previous versions of Windows Mobile. I dont understand the problem here.
  • -1 Hide
    Regulas , February 17, 2010 2:30 PM
    Good luck with that.
  • 2 Hide
    apmyhr , February 17, 2010 2:40 PM
    A lot of you seem to think this will tack on 50 to 100 dollars onto the price of each phone. I highly doubt that. I'm pretty sure it will probably be more like 10-20 dollars. I'm shooting this number out of my ass, but it makes sense considering most reports claim Microsoft charges about 50 dollars for Windows 7 on a 1,000 dollar machine. Using the same logic of 5%, a 200 dollar cell phone should be about 10 bucks. In the scheme of things, I don't think a 5% charge for the OS will dissuade manufacturers from producing the phones.
  • 6 Hide
    southernshark , February 17, 2010 2:42 PM
    There is no such thing as free. People need to wake up and realize that. Ballmer is dead on and the large corporations that work with Microsoft understand that.

    Its not like AT&T is ran by a bunch of dumb smelly hippys who say "Google is free dude lets go with it."

    Google isn't free. It forces people who use it to funnel advertising dollars to Google. If another company wants to benefit from those advertising dollars then they need to use a different system. Rather than attempting be an advertiser, Microsoft just sells the software and lets the buyer do with it what they want.
  • 0 Hide
    ethanolson , February 17, 2010 2:44 PM
    Just fix the freakin' lag from the other WinMo phones and you've got a sale with me! I like the business features of the Windows Phones and I assume that they will still be in here (system certificates, domain join, encrypted email, etc.).
  • 0 Hide
    apmyhr , February 17, 2010 2:56 PM
    dman3kOk, Ballmer, we need more details on the development side of things. If developing an WP7 app takes at least a $600 package to do it, what a shame - I hope WP7 fails. If you open WP7 development for free, or a cheap cost one-time fee for a development kit which includes developer key, then I hope WP7 succeeds. Development is the most important aspect of the mobile platforms.

    This is a good question. On this front, I think most people can agree that Microsoft is very kind to developers and offers some great tools and API's. Especially considering you can now get free trimmed down versions of Visual Studio (C# Express, Web Express, ect...). So yeah, I will be curious to see what they have planned for developers. I hope they will have the phones be able to run Silverlight and .NET apps.
  • 0 Hide
    cadder , February 17, 2010 2:56 PM
    Selling their software is not a problem. If they price it too high then that would be a problem. If it works, people will buy it and price won't figure into it that much. If it doesn't work then people will buy something else, even if WM7 was free.
  • 0 Hide
    ajcroteau , February 17, 2010 3:03 PM
    I understand Microsoft is in the business of selling software, and obviously the other manufacturers are on board with this, there just going to pass the cost of the software back to the consumers. But, Microsoft has always been in the business of selling partially working completed software littered with bugs, then selling you the solution to their original problems later... case in point, Windows Vista & Windows 7...
  • 0 Hide
    nebun , February 17, 2010 3:07 PM
    i think it's ok for Microsoft to charge for the os on the phone. if they only charge for the phone they will make no money, software is not free, someone has to stay in front of a computer monitor and write the code for it.
  • 1 Hide
    Yuka , February 17, 2010 3:16 PM
    Is that thing gonna come with WAT? lol

    Anyway, it's their business model, let them be. If it works for them and they ain't breaking any laws, I see no wrong in it. If they product sucks, it's gonna show in the profit (at least with no superb marketing campaign it will, lol).

    Cheers!
  • 1 Hide
    rbarone69 , February 17, 2010 3:35 PM
    Some people fail to realize that Google does make money on their software, it's just built into the price of their hardware (i.e. $500 Nexus)

    I have a droid, I can tell you this much, I don't have banner ads on it generating revenue for Google.

  • -4 Hide
    masterasia , February 17, 2010 3:38 PM
    No big surprise here. They charge for almost everything.
  • 0 Hide
    mlopinto2k1 , February 17, 2010 3:43 PM
    I'm just glad I can't afford one.
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