Microsoft intends to hold to its policy of charging royalties for Windows Mobile, says company CEO Steve Ballmer. The operating system is facing increasing competition, most notably from Nokia's newly royalty-free Symbian platform, and Google's open-source Android platform, used on phones like the upcoming T-Mobile G1. "We are doing well," Ballmer tells Reuters, "we believe in the value of what we are doing." Microsoft receives approximately $8 to $15 for each Windows Mobile-based phone sold.

"It's interesting to ask why would Google or Nokia, Google in particular," says Ballmer, "why would they invest a lot of money and try to do a really good job if they make no money. I think most operators and telecom companies are skeptical about Google." The company makes the bulk of its revenue on advertising, and it is believed that Android is a means of promoting the use of mobile e-mail and web browsing, which may expose phone owners to more of Google's ad placements.

"In the case of Nokia," he adds, "are they really open sourcing, or are they really making Symbian their own operating system? We have to wait and see."

Ballmer meanwhile denies long-standing rumors of a Microsoft-built phone. "I do not anticipate us building a phone. Sorry, we are not going build one," he comments.