Microsoft will spend $500 million to sell its Windows Phone 7

1st September, 2010 by adina
Tags: Microsoft, News, Windows Phone 7

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A recent leak reveals that Microsoft is prepared to spend about $500 million on marketing for the launch of its Windows Phone 7. It seems that $1 billion was spent on the fall release, but only half of this sum was really focused on development. There is no confirmation from Microsoft related to this amount, but an estimation of Deutsche Bank shows a sum of at least $400 million, which does not include direct financial incentives granted to phone manufacturers.

Microsoft executives have said they would spend billions of dollars in the first year for selling and developing purposes.

Thee expenses are included in a large effort the company makes to revitalize collapsing mobile efforts. Before unveiling Windows Phone 7 in February, Microsoft has already lost a significant part of its share to devices like BlackBerry or iPhone, as well as Android phones. Another phenomenon was that of many companies, once loyal to Windows Mobile, dropping it completely or partially during last year, arguing that the operating system had become an impediment to their performance, compared to Android. Motorola and HTC particularly have profited from dropping Microsoft’s operating system and adopting Google.

Although major improvements have been brought to its operating system, Microsoft seems to face difficulties in getting support. According to Deutsche Bank, only few of its partners – LG, Samsung and HTC – are still committed. Meanwhile, others, like Dell, Sony Ericsson, Toshiba and Garmin-ASUS have Windows Phone 7 plans, but Android is now capturing most of their attention. The acquisition of Palm by Hewlett-Packard has made it focus on webOS and consequently toss aside Windows Phone 7.

As a result, Microsoft not only had to turn to paying costs of phone development but also to give incentives to application developers in the form of guaranteed income for Windows Phone 7 applications in the case the Windows Phone Marketplace would fail during the same period. Meanwhile, Apple and Google have paid minor incentives or only made simple promotions, as enough interest has been shown for them and many developers came voluntarily.

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