Saturday, August 28, 2010

Microsoft Marches on Smartphone Market

Microsoft is preparing itself for all out war on the smartphone market with half a billion dollars being spent on the Windows Phone 7 launch. It is thought that another billion dollars will go towards marketing when phone 7 is released.

Android mobile users will realise that this is a genuine competitor to their product, but also that they have helped to make the Android mobile successful and it is the fastest growing smartphone product available.

The success of the Android is part of the reason why Microsoft is spending so much money on branding their phone. The $500 million launch expenses figure for phone 7 is similar to Apple's entire advertising budget for 2009. The other motivation is the failure of the Microsoft Kin smartphone which was withdrawn earlier this year.

Not only is Microsoft spending big bucks on the launch but it has agreed to subsidize handset manufacturers' non-recurring engineering costs. There are also revenue guarantees for the manufacturers of apps. Microsoft hopes to challenge the success of apps for the Android and iPhone with the latter being a billion dollar industry.

An analyst at Deutsche Bank, Jonathan Goldberg, said that this was a pivotal moment for Microsoft in the smartphone market: “This is make or break for them. They need to do whatever it takes to stay in the game.”

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