Microsoft Argues: Win7 Phone Fee Cheaper Than 'Free'

Dennis Faas's picture

With Microsoft's latest mobile Windows finally shipping to manufacturers, handset makers are deciding whether it's worth paying a licensing fee for the software when free alternatives (such as Google's Android) are available. However, Microsoft argues that the hidden costs of open source systems mean Windows represents better value.

Windows 7 Phone License Fee Cheaper Than 'Free'

Manufacturers that want to install Windows Phone 7 on their handsets will have to pay a licensing fee to Microsoft, just as computer makers do with Windows. The fee is understood to average around $15 a handset.

That's one of the ways Microsoft hopes to make back the money it's spending on the system: one report says the development and marketing for the launch alone will be $400 million and the total costs could run past a billion dollars.

Naturally, that's created plenty of talk about how the fee might be a step too far for manufacturers who were already considering open source systems such as Android. While Microsoft offered an official response, a source contacted Henry Blodget, who heads up the influential Business Insider site. (Source:

MS: Open Source Carries Hidden Costs

According to Blodget, there are a variety of hidden costs associated with Android. The biggest is that companies using Android may be affected by lawsuits from those who believe their work has been copied unlawfully in the system's development. Microsoft notes its licensing arrangement means it will deal with any intellectual property lawsuits issued over Windows.

The source also argues: a) that it's easier for manufacturers to update Windows Phone 7 with their own code than to do the same with Android, b) that its easier to test Windows Phone 7 on handsets that are still in production, and c) that Windows Phone 7 includes several features that makers of Android handsets can't include without paying licensing fees. (Source:

Microsoft also says that it does a better job of including drivers, the software needed to make a smooth link between the operating system and a phone's hardware components.

Do Manufacturers Really Care?

There are valid points amongst the claims. The problem for Microsoft is that in reality, the license fee isn't a big deal for most manufacturers. Given the sale price companies charge for smartphones (which is often considerably higher than the price consumers pay, thanks to subsidies from network carriers), $15 either way won't be a major difference in which system firms go for.

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