It looks like we may have some information on how much Microsoft charges hardware manufacturers for its Windows Phone licenses. The news comes from smartphone manufacturer ZTE, who recently unveiled a new Windows Phone, the ZTE Tania.
According to Trusted Reviews, they were informed by Santiago Sierra, a Portfolio Manager for ZTE in the UK, that ZTE pays Microsoft between £15 and £20 for each Windows Phone smartphone, which works out at around $23 to $30.
We had previously heard that Windows Phone manufacturers were paying Microsoft around $10 to $15 for each Windows Phone device, and the new figures revealed are double what was previously rumored.
Comparative Licensing Costs
It isn’t clear as yet if Microsoft is charging this amount to each individual Windows Phone maker, or if they are charging different amounts to different manufacturers. This discrepancy in licensing fees could be due to various factors such as the volume of devices produced, the specific agreements between Microsoft and the manufacturers, or even the regions where these devices are sold. For instance, larger manufacturers like Samsung or HTC might have different licensing agreements compared to smaller companies like ZTE.
Microsoft’s strategy of charging for Windows Phone licenses contrasts with Google’s approach to Android, which is offered for free. However, Microsoft has managed to monetize Android indirectly. The company has signed deals with over 70 percent of Android device makers on patents related to Android, and manufacturers are reported to be paying Microsoft around $10 to $15 for each Android device sold. This means that even though Android is free, Microsoft still earns significant revenue from it through patent licensing.
Impact on the Smartphone Market
The licensing fees for Windows Phone could have various implications for the smartphone market. For one, it could affect the pricing of Windows Phone devices. Higher licensing costs might lead manufacturers to increase the retail prices of their devices to maintain their profit margins. This could make Windows Phones less competitive compared to Android devices, which do not have such licensing fees.
On the other hand, the revenue generated from these licensing fees could be reinvested by Microsoft into further development and improvement of the Windows Phone OS. This could lead to better features, more frequent updates, and overall a more robust operating system, which could attract more users and manufacturers in the long run.
Moreover, the licensing fees could also influence the decisions of manufacturers when choosing which operating system to support. Smaller manufacturers with tighter budgets might opt for Android to avoid the additional costs, while larger manufacturers with more resources might be willing to pay the fees for the benefits of a diversified product lineup.
In conclusion, while the exact details of Microsoft’s licensing fees for Windows Phone remain somewhat unclear, the information from ZTE provides valuable insight into the costs involved. These fees are significantly higher than previously rumored, and they highlight the different strategies employed by Microsoft and Google in the highly competitive smartphone market. Whether these costs will impact the adoption and success of Windows Phone remains to be seen, but they certainly add an interesting dimension to the ongoing battle between mobile operating systems.
Source Trusted Reviews, The Verge
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