Handset maker: Windows Phone OS costs $23-plus per copy?

Handset maker: Windows Phone OS costs $23-plus per copy?

Summary: Is Microsoft charging some of its phone OEMs between $23 and $31 per copy to license its Windows Phone OS?

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There's a report on TrustedReviews.com that quotes an official with Windows Phone OEM ZTE as saying the company is paying Microsoft somewhere betweeen $23 and $31 per copy to license the Windows Phone operating system.

(I wonder whether this total includes the patent-licensing royalty fees that Microsoft is levying from a growing number of Android smartphone OEMs, which some have pegged at somewhere between $5 to $15 per phone. I've asked Microsoft officials just in case they might respond. but no word back yet.) Update: Microsoft declined to comment on any part of the ZTE report.

As Neowin noted, Microsoft could and probably does have a tiered pricing system for the Windows Phone OS, just as it traditionally had/has for Windows. The top tier most likely pays a lower licensing fee, given they move more phones. Is ZTE a "top tier" OEM like Samsung or HTC? Doubtful, even though the Chinese phone maker, the No. 4 player worldwide, allegedly has some big expansion plans.

The new $23-$31 figure is interesting in that -- if it's accurate -- it provides one of the first (if not the first) glimpse as to what OEMs are paying for the Windows Phone OS. It's widely believed Microsoft still currently gets more per copy from OEMs for licensing Windows than it does by licensing the Windows Phone OS. Estimates of the price-per-copy for the two OSes have been all over the map, ranging from $3 per copy per Windows Phone (for top tier licensees), to $30 to $100-plus per copy of Windows 8.

In other Windows Phone news this week, Microsoft's tightest OEM partner, Nokia, has sold more than 450 of its mobile communications patents and applications to Sisvel International. (Nokia made a similar move last year when it offloaded about 2,000 of its patents to Mosaid Technologies.)

The purpose behind these moves by Nokia seems to be designed to offload patent licensing and enforcement, according to FOSS Patents blogger Florian Mueller.

"The sale of such patents by large operating companies to patent monetization (and assertion) entities is pretty common by now," said Mueller (who is working on a study of FRAND patents for Microsoft). "If any other operating companies in the industry would have preferred to take a license to those patents directly from Nokia, they could have done so all the time, and most license agreements survive a sale of the licensed patents. If any other industry players refused to take a license in the past, they will now have to negotiate with a patent holder they can't even countersue because Sisvel doesn't have any products one could claim to infringe any patents."

Nokia also is rolling out starting this week its second update for its Lumia 800 phones aimed at addressing battery-life and wifi connectivity concerns.

Topics: Nokia, Hardware, Legal, Microsoft, Mobility, Operating Systems, Software, Windows

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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  • RE: Handset maker: Windows Phone OS costs $23-plus per copy?

    These handset makers should be happy. I bet it would cost nearly $100 per license for Crapple's ios, and hemorrhoid is mostly made up of stolen Windows Phone IP. So all in all Windows Phone 7 is a bargain. Microsoft is, once again, putting the users interest in front of their own. Why can't people see how great Microsoft is?
    Stephen-B
    • RE: Handset maker: Windows Phone OS costs $23-plus per copy?

      @Stephen-B - lol! I get it. You are trying to be the new Mike Cox. Sorry, your satire sucks. -10
      The Danger is Microsoft
      • RE: Handset maker: Windows Phone OS costs $23-plus per copy?

        @The Danger is Microsoft you're an anti Microsoft troll, you should lose your internet privileges for that! Anyone that does not believe in the Power, and Wisdom of Microsoft should be made to suffer.
        Stephen-B
    • RE: Handset maker: Windows Phone OS costs $23-plus per copy?

      @Stephen-B
      You're funny and one would think you're almost being sarcastic. I couldn't imagine anyone being naive enough to worship MS in such a manner. It sounds like you're trying to start fires and fan the flames.
      Still, it's entertaining. Keep up the good work... :-)
      rpollard@...
      • RE: Handset maker: Windows Phone OS costs $23-plus per copy?

        @rpollard@... I'm being totally honest. I make a living supporting, and recommecding 100% Microsoft Solutions. I am also a Massachusetts Democrat, and will vote 100% Democrat every time. I only support the best, which is Microsoft
        Stephen-B
  • Chop chop

    You guys have a really good spam filter. It lets in the spam, and filters out the notes. What more could anyone want?
    Robert Hahn
    • RE: Handset maker: Windows Phone OS costs $23-plus per copy?

      @Robert Hahn

      Hahahahahahaha
      rjohn05
  • RE: Handset maker: Windows Phone OS costs $23-plus per copy?

    Never heard of trustedreviews.com before. I wouldn't expect an official statement from Microsoft on this though, they wouldn't want to release their financial contracts. $23 is a fair price for Windows Phone given that its the new up and coming mobile OS to have it would make sense. Hopefully Microsoft will investigate why this information was leaked.
    Loverock Davidson-
    • Up and coming from 2.7 to 1.5 percent market share?

      @Loverock Davidson- ... actually the avalance of positive reviews I'm hearing is all centered on Android.

      My company has apps out for iOS, Android and (unfortunately) RIM. We've had a torrent of problems and support calls on RIM. One or two on iOS and none on Android.

      We wouldn't even be doing RIM except for the fact that the IT department here keeps issuing them internally just out of inertia.

      This week Steve Wozniak wrote a column praising Android and saying how much more useful it's become. I've got all the phones for testing purposes, and I'm starting to spend a lot more time studying Android. It is the phone OS of the future. (Unfortunately, as I love my iPhone 4S)

      At my company, there has not even been discussion about Windows Phone OS, with the sole exception of my bringing it up at a meeting just to get a laugh. I can report that it was successful, so WP7 is proven good for something.
      HollywoodDog
      • RE: Handset maker: Windows Phone OS costs $23-plus per copy?

        @HollywoodDog WP 7 is the future, if you don't recognize that, you deserve to lose your job.
        Stephen-B
      • RE: Handset maker: Windows Phone OS costs $23-plus per copy?

        @HollywoodDog
        That is your company's loss. You can mention to your superiors in the next meeting about cutting back on android development since its full of patent lawsuits and so that particular mobile OS may not be around for much longer.
        Loverock Davidson-
      • My company is flexible like reed, nimble like grasshopper

        @HollywoodDog ... when winds of change blow, our sails we adjust.

        When WP7 blows out of < 5% territory, we shall revisit it.
        HollywoodDog
      • RE: Handset maker: Windows Phone OS costs $23-plus per copy?

        @HollywoodDog
        You have to understand that The Woz is a techie at heart. He speaks for the techies of the world which are the minority. He can't help himself. But, if you don't care about having to root your system to get what you want then keep loving your iPhone 4S. I do! Not yours, mine. :-)
        rpollard@...
      • RE: Handset maker: Windows Phone OS costs $23-plus per copy?

        @HollywoodDog - at my company also, managers assume WP7 is not worth looking into. Real smart, eh? Doesn't bother me, I can always change companies.
        scH4MMER
  • The cost makes sense

    Windows Embedded sells for a similar price.
    Joe_Raby
  • RE: Handset maker: Windows Phone OS costs $23-plus per copy?

    I got the HTC Trophy back in December when my 2 year contract was up, I could have had superior (hardware anyway) android based handsets for free, but the trophy that has been available for around 8 months... $29.99 I guess they don't want to subsidize the cost of the OS?
    Win8AnUglyDisaster
  • RE: Handset maker: Windows Phone OS costs $23-plus per copy?

    I got the HTC Trophy back in December when my 2 year contract was up, I could have had superior (hardware anyway) android based handsets for free, but the trophy that has been available for around 8 months... $29.99 I guess they don't want to subsidize the cost of the OS?
    Win8AnUglyDisaster
  • In other words...

    Microsoft needs to sell about 2 billion Windows Phones annually to make the same revenue that Apple makes from its iPhones.
    rynning
    • Hardware has a much higher margin

      @rynning ... premium priced hardware that is.
      HollywoodDog
    • RE: Handset maker: Windows Phone OS costs $23-plus per copy?

      @rynning

      In other words MS needs to send 20 PCs to make the same money as the lowest priced Mac, which I guess they are doing.
      mm71