Microsoft Said To Be Investing Over $2 Billion On Windows Phone Makers In 2014

Microsoft Said To Be Investing Over $2 Billion On Windows Phone Makers In 2014

Keep calm and keep investing? That seems to be the play on the Windows Phone front for the year, as the latest gossip on the matter is that Redmond is ready to invest an eye watering $2.3 billion to bring more hardware makers to the Windows Phone party.

Sure the information comes from the Chief Editor of Russian site Mobile Review, Eldar Murtazin, and this someone that has had a bit of a hit or miss (usually a miss) scorecard in the rumors game.

But according to his latest tweet Redmond is ready to pay big money to any mobile phone maker that is willing and ready to launch smartphones powered by the Windows Phone mobile operating system.

Pay To Play?

This is actually the same strategy Microsoft employed to great success with Nokia. A little while ago Nokia was getting $1 billion a year from the technology titan as support money to develop devices for the fledgling operating system.

Now according to the rumor above, Redmond is willing to part with well over $2 billion this year, with Samsung set to receive the largest amount of money. The breakdown is as follows:

Samsung to receive $1.2 billion, Sony $500 million, Huawei $600 million, while the remaining $300 is reportedly reserved for other hardware makers to build and sell a Windows Phone device.

Guess which column HTC finds itself in?

In any case, if this is what happens, this extra motivation will be welcome by hardware vendors. If anything, it shows that Microsoft is taking a much more aggressive approach to win over as much worldwide market share as it can after taking over BlackBerry as the third mobile ecosystem last year.

Where Does The Money Go?

Down the rabbit hole, where else? Samsung, Sony and Huawei have deep, deep pockets, but even these vendors can use more money to market their Windows devices. It could also end up as support cost in order to help with the development of these handsets.

Smaller vendors, however, can put this money to even better use in areas they see fit.

Word is that Microsoft actually makes upwards of $2 billion a year from patent royalty payments for every Android device sold in the world — diverting that money to promote and diversify its in-house mobile operating system is not the worst idea in the world.

Brand Loyalty, Anyone?

Ultimately the only thing that matters in the end is brand loyalty. This is something that companies like Samsung and Sony enjoy, though it can easily be shattered to a million different pieces if the said vendors does not support or stand behind its hardware.

And like it or not, Windows Phone partners, this side of Nokia, have been guilty of this.

All three in fact, Samsung, HTC an Huawei have developed Windows Phones and then stopped supporting them the very next year, leaving buyers and users stranded. With the traction Windows Phone has enjoyed over the past few quarters, this is the last thing it needs.

Inevitably, it all comes down to the fact that this is just a rumor, a very wild one at that. If it was coming from some of the more trusted sources, those that have a better pulse on Microsoft, then maybe.

But it is a shaky source overall — even as there are gossips of both Samsung and Sony developing new Windows Phone high-end handsets, even as Redmond seems to be getting more aggressive in its mobile approach, even as the company has a history of financially supporting its hardware partners.

And while we have no official confirmation, an approach like this is not all that farfetched.

If something like this does indeed happen, if a whole new range of Windows Phone devices launch this year, then we may just see the Android platform starting to lose market share in the near future.

And who knows, we may just see Microsoft taking over second place from Apple in the distant future.

  • Ray C

    It’s just the cost of doing business. They should have done this last year. I think HTC should have been included. They subsidize the cost of making the HTC 8X another no-contract phone. They need one at about $100 more than the 520. This is not desperation. This is the cost of doing business. This is no different than a company spending money on marketing and promotions. Vendors did not stand behind their products last time around. If everyone was as dedicated as Nokia, Windows Phone would probably be twice the share it is now.

  • Ray C

    Microsoft’s next target should be carrier. There should be no carrier without a Windows Phone at all 3 price points. They need to really target the budget carriers like Cricket, Boost, C-Spire, Metro, etc. All these carriers sell nothing but Android. Metro is the only one I’ve ever seen a Windows Phone advertise. MIcrosoft needs to get in there