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Microsoft spending $500 million to sell Windows Phone 7

updated 10:00 am EDT, Fri August 27, 2010

Microsoft to put half billion in marketing WP7

A leak late Thursday hinted that Microsoft is slated to spend $500 million just on marketing for the Windows Phone 7 launch. One source understood that $1 billion was being spent on the fall release, only half of which was actually focused on development. Microsoft hasn't confirmed the amount, but Deutsche Bank estimated for TechCrunch that it was at least $400 million, not including direct financial incentives to phone manufacturers.

Microsoft executives told the analyst that they would spend "billions" in the first year on both selling and developing WP7.

The expenses would be part of a large effort to revitalize Microsoft's collapsing mobile efforts. Even before unveiling WP7 in February, the company had lost much of its share to the BlackBerry, iPhone and Android devices. Many of the companies that had once been loyal to Windows Mobile have since dropped it partly or completely in the past year as it became a drag on their performance compared to Android. HTC and Motorola in particular profited the most from dropping Microsoft in favor of Google.

Even with a major improvement of its OS, Microsoft may face difficulties getting support. Of the launch partners, only HTC, LG and Samsung are still genuinely committed, Deutsche Bank said. Dell, Garmin-ASUS, Sony Ericsson and Toshiba still have WP7 plans, but most of their attention is now on Android. HP's acquisition of Palm has left it focusing on webOS and has tossed aside WP7 as a result.

The company has not only turned to paying for phone development costs but to incentivize app developers by providing guaranteed income for WP7 apps even if the Windows Phone Marketplace fails during the same period. Apple and Google have provided minor incentives such as developer phones or simple promotions, but they have had enough interest on their own for many to come voluntarily.



By Electronista Staff
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Comments

  1. pairof9s

    Mac Enthusiast

    Joined: Jan 2008

    +10

    Just as well...

    Spend $500 million telling us that man has landed on the moon, Microsoft. You are SOOOOOO late to the party. Having Windows means absolutely nothing now...this is not 1995.

    /

  1. hokie17

    Junior Member

    Joined: Jul 2007

    +6

    Get a Mac...

    "Advertisting, advertisting, advertisting, fix Vista..."

    "Do you really think that amount of money will fix Vista?"

    "I guess you're right. I'll just put it all on advertisting."

    :D

    Comment buried. Show
  1. Jonathan-Tanya

    Fresh-Faced Recruit

    Joined: Oct 2004

    -12

    MS will have a hit

    The pent up demand for this OS is huge.
    The respect MS has with business, remains.
    The games are lined up too.

    Big budget, check. Apps, well they may not have shear numbers, but they'll have some unique and 'very well known' games and business apps, so check.

    No trying to force every customer to buy the same phone, check. So it will come at different price points, from varied manufacturers - the same strategy Android used to catch up to, and then surpass iOS.

    I am not a MS fan. In fact, I'd prefer that MS fail here, because I like the competition between Apple and Android.

    But, this phone will surpass the modest expectations that were set for it. And so, the story will be, Microsoft is back. At least in the near term. Now will they hold the momentum?

    I hate to guess.

  1. Foe Hammer

    Fresh-Faced Recruit

    Joined: Feb 2005

    +6

    Incredible!

    I didn't realize how much the cost of t*** polish had gone up.

  1. Fast iBook

    Fresh-Faced Recruit

    Joined: Mar 2003

    +1

    Your shipment...

    Your overpriced shipment (or lack there of) of fail will arrive shortly.

    - A

  1. ethical_paul

    Fresh-Faced Recruit

    Joined: Mar 2002

    +1

    If you can't beat 'em, buy 'em

    Or at least buy a bunch of advertising

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