updated 01:30 pm EDT, Wed October 13, 2010
Taiwan phone firms say Windows Phone 7 too costly
Microsoft may have lost key Taiwan phone manufacturers after the costs and long delays for Windows Phone 7, companies based in the area reportedly said Wednesday. Most of them, including relative heavyweights such as Compal, Foxconn, Inventec and Pegatron, have committed to developing for Android over the next two to three years and aren't ready to switch. The Digitimes contacts further allege that they consider Microsoft's licensing fee too expensive when Google gives away Android for free.
As such, only a handful of companies may get into WP7 when it arrives, they added. HTC may end up controlling 70 to 80 percent of the market simply by being one of the initial partners. One of the likely remnants would be ASUS, which was a long-time Windows Mobile loyalist and should help create a Garmin WP7 phone for early next year.
The defections wouldn't be fatal to Microsoft but could erode one of its one-time advantages, as it regularly catered to small manufacturers that couldn't afford to develop their own platforms. Google has also depended heavily on major manufacturers but has deliberately waived licensing fees for Android since it expects to make up most of the revenue in mobile search ads.
Microsoft has usually tried to stamp out Linux-based platforms like Android by price dumping with Windows licenses, but the popularity of Android and the low prices Microsoft must already charge could make such an approach unfeasible.