10-01-2008, 12:00 PM
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Contributing Editor Emeritus
Join Date: Aug 2006
Posts: 8,228
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Microsoft To Continue Licensing Fees For Windows Mobile
"Microsoft plans to continue charging licensing fees from handset makers for Windows Mobile operating system and not follow the free offerings of Google and Nokia, reports Reuters. Microsoft charges $8 to $15 per phone, according to research firm Strategy Analytics, which sounds like shockingly high amount for a mobile operating system that's less than stellar, especially when you could get Android's decent (but not great) OS for free. "
Not sure that should come as a surprise to anyone. In other breaking news, the oceans will be wet today.
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10-01-2008, 03:53 PM
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Pupil
Join Date: Feb 2006
Posts: 17
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Not a surprise but it will become increasingly difficult for manufacturers to justify the cost.
Last edited by andyb; 02-24-2009 at 10:55 AM..
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10-01-2008, 05:12 PM
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Executive Editor
Join Date: Aug 2006
Posts: 29,160
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Quote:
Originally Posted by andyb
Not a surprise but it will become increasingly difficult for manufacturers to justify the cost.
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Indeed, Microsoft has to provide tremendous value for that fee with the competition being free. Windows Mobile 7 had better rock...
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10-01-2008, 08:37 PM
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Thinker
Join Date: Feb 2005
Posts: 471
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Mircosoft is in a pretty tricky position here.
Charging $8-$15 makes sense for low volume, high end smartphones. Windows Mobile is adding value and the license fee can be tacked onto the price of the phone without many complaints.
However, even $8 is going to make a big dent into a manufacturer's profits once you hit the mainstream. Mainstream phones can sell tens of millions of units and who wants to pay $80 mil to Microsoft in license fees? Even if the alternatives aren't quite so good, they look increasingly attractive the closer the mainstream you get.
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10-01-2008, 10:06 PM
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Swami
Join Date: May 2004
Posts: 4,396
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License Fees
Quote:
Originally Posted by andyb
Not a surprise but it will become increasingly difficult for manufacturers to justify the cost.
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Why? How much do PC makers pay to license Windows? Linux is free, so why haven't all PC makers switched to Linux?
I'm surprised people think Microsoft should give WM away. What would be the point in developing it? Let's see how Android helps Google's bottom line.
Steve
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10-01-2008, 10:30 PM
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Sage
Join Date: Jul 2003
Posts: 740
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Quote:
Originally Posted by Pony99CA
Why? How much do PC makers pay to license Windows? Linux is free, so why haven't all PC makers switched to Linux?
I'm surprised people think Microsoft should give WM away. What would be the point in developing it? Let's see how Android helps Google's bottom line.
Steve
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Synergies? Pushing other products you own?
I remember when MS was giving away Outlook for free in order to establish a presence in that segment of the market. Besides the main problem here is the delay with WM 7.
You can charge eve a premium price with something that is in high demand but it seems that MS is slowing down instead of accelerating.
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10-01-2008, 11:06 PM
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Swami
Join Date: May 2004
Posts: 4,396
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Loss Leaders
Quote:
Originally Posted by Fritzly
Synergies? Pushing other products you own?
I remember when MS was giving away Outlook for free in order to establish a presence in that segment of the market.
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That may work for some businesses, but it's harder for one under antitrust watch. Some people would complain about this being a loss-leader, trying to extend the Windows PC monopoly into the phone market.
IBM used to give its mainframe software away to help sell computers, but that got stopped in their anti-trust settlement, if I recall correctly. When I worked for IBM, we had to price software where we thought it would make a profit on its own. (It might not make a profit, but we had to have a good faith belief that it would.)
Steve
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10-02-2008, 04:07 AM
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Theorist
Join Date: Aug 2006
Posts: 300
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Quote:
Originally Posted by Pony99CA
Why? How much do PC makers pay to license Windows? Linux is free, so why haven't all PC makers switched to Linux?
I'm surprised people think Microsoft should give WM away. What would be the point in developing it? Let's see how Android helps Google's bottom line.
Steve
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There is a very serious difference here - Windows on the desktop is an entrenched, near-monopoly. There thousands, or tens of thousands of business applications that run on Windows, and only Windows. PC makers would love, it seems, to switch to Linux (note that Dell, and Lenovo and others do offer it as an option) but realistically, it's an existing standard.
In mobile phones, Microsoft is not in anything like that position of strength: WM has a fraction of the total mobile phone market, less of the smartphone market than RIM, or probably Symbian. There are not any widely-deployed business applications that only run on Windows Mobile. Even OTA Exchange Integration is available for the iPhone, and (via other software) for RIM's blackberry.
This means that Micrsoft has to actually deliver $8 - $15 or whatever of added value, unlike with Windows, where most companies have little choice, given their existing base of apps. If Microsoft can't find a way to lower that cost, then as smart devices move downmarket (from costing $500 to costing $150), a $15 surcharge goes from being neglible to a 10% chunk.
There are compelling reasons why Microsoft should either drop it to $3, or give it away. Notably, Symbian's owners (mostly Nokia) have decided to open-source it, and give it away. Android is free, and open-source - and if you think this does not, in the end, lead to revenue for Google, then I think you underestimate them.
Google is thinking strategically. And this HTC/T-Mobile G1 is their first attempt. Think about where Windows CE 1.0 was, and how Palm users scoffed at it. Android could (and it might not) quickly add features, polish, and applications.
While it's true that it could fail, I also very much believe that Android could end up eating WM's lunch. I love my HTC Touch Diamond, partly because it hides WM beneath a slick shell. If there comes a time when I can install an "Android 2.0" on it that gives me the same features but better performance, and a more customizable UI, then I'd probably go for it.
Whatever Steve Ballmer says, I am convinced that this has put the Fear of Google into the WM team, and so hopefully WM7 will be a revolutionary leap forward, and not just "WM 6.5". I also believe that if they continue charging over $7 or $8, it will become the "Zune" of phone OSes, no matter how good it is. Good can be copied by Android, and made free. WM needs to be close enough to 'free' that the carriers don't notice the difference.
__________________
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10-02-2008, 07:52 AM
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Thinker
Join Date: Feb 2005
Posts: 471
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Quote:
Originally Posted by Pony99CA
Why? How much do PC makers pay to license Windows? Linux is free, so why haven't all PC makers switched to Linux?
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To add to Kirkaiya's answer, the bulk OEM licensing for the desktop version of Windows is heavily discounted. I wouldn't be surprised if Dell pays a similar price for Windows Vista Home Premium as Motorola pays for Windows Mobile Professional.
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10-02-2008, 04:53 PM
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Pupil
Join Date: May 2007
Posts: 37
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Why companies willingly pay for an OS
Here's why they use WM and WinCE:
1) Many companies shy away from open source / free code. They feel they have less liability if they pay for the use of something from another company.
2) Many companies can't afford to maintain an "free" OS. They happily pay MS's fee in return for not having to maintain the OS or always develop bluetooth, printer, wifi, keyboard, lcd, you-name-it drivers. (Might still have to do some work.)
3) MS has good development tools and documentation, with support.
4) MS has support for partner companies, from help with development and porting, to helping create custom homescreens like they did for the Shadow.
5) If you're a phone maker, one draw is that there are thousands of WM apps and programmers.
Now, it's possible that some companies will run dual OS platforms for a while. Perhaps, down the line, the lure of not paying royalties will work out when Android actually has a stable OS base and tons of apps.
Last edited by kdarling; 10-02-2008 at 04:56 PM..
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Linear Mode
