Tuesday, August 31, 2010

Microsoft Investing Billions In Windows Phone 7

Microsoft is hoping to give Windows Phone 7 the start it needs by pumping about a billion dollars into the launch.

Microsoft is investing a huge amount of time and effort in Windows Phone 7, that much is obvious. But it looks like the company is going to spend two boatloads of money on it too. Rumor has it, Redmond will be sinking at least half a billion dollars on Windows Phone 7 advertising along with payments to developers and handset manufacturers to ensure all is as it should be when the operating system launches.

TechCrunch cites analyst Jonathan Goldberg who believes Microsoft will spent $400 million in advertising alone. Add in other necessary costs, along with the millions Microsoft has already spent on "non-recurring engineering" costs that help offset development costs for manufacturers, and you've got quite a pretty penny.

TechCrunch also reports that some manufacturers have accepted payments only to back out of agreements at a later date. HP was one of the partners named at the WP7 launch and was supposed to be building several WP7 phones. But the company purchased Palm a month later and it's thought that whatever Microsoft paid (it could have been as much as $20 million) may be lost.

Goldberg goes on to say that, on a recent visit to Microsoft, an executive told him the company would be spending "billions" on marketing and development for year one. Another said it'd spend a billion on the launch, with half a billion earmarked for development costs and the other half poured into marketing.

That's a huge chunk of change, even if we discount what the Microsoft sources are saying and just go with Goldberg's own figure of half a billion. However, Microsoft has reached a point in the mobile market where it's now or never. Windows Mobile isn't doing as well as the company hoped and the scars have yet to fade from the failures that were the Kin One and Kin Two.

Microsoft first announced Windows Phone 7 and the Mobile World Congress in March of this year. The first handsets running the operating system are expected to hit before the holidays.

Source: tomsguide.com

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