Microsoft to Charge for Windows Phone 7

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.

  • Raishi
    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.
  • drksilenc
    or they could just do the same thing that google is doing with there phone and use it as a profit generator for bing... idk that just makes alot more sence than driving up the cost of the phone another 1-2 hundred dollars... its not like they are just a software company ither... that may be there core buisness model and why bing costs more to run than its worth but what ever this is balmer
  • mjello
    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.
  • Honis
    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.
  • tayb
    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.
  • back_by_demand
    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.
  • dman3k
    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.
  • blackened144
    Its going to be the exact same as the previous versions of Windows Mobile. I dont understand the problem here.
  • Regulas
    Good luck with that.
  • apmyhr
    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.