Microsoft will reportedly spend more than $500 million dollar trying to push-start it upcoming Windows Phone 7 mobile platform. The company is trying to catch up with well-established competitors such as BlackBerry Smartphones, the iPhone, and Android.
It’s currently estimated that Microsoft will invest approximately $400 million in marketing alone. The rest of the money will be used to pay developers and original equipment manufacturers. The purpose is to get Windows Phone 7 on par with existing platforms as much as possible, so that it can stand a chance.
Deutsche Bank telecommunications analyst Jonathan Goldberg states that Microsoft has already committed to pay millions of dollars for “non-recurring engineering” costs in order to counterbalance development costs for OEMs.
“This is make-or-break for them. They need to do whatever it takes to stay in the game. It’s still wide open. They don’t have to take share from Android or Apple, so long as they can attract enough consumers switching from feature phones.”
Overall, Microsoft is expected to spend up to $1 billion in both marketing and manufacturing costs in the first year of Windows Phone 7, say sources familiar with the matter.
Microsoft has already take this step before. When the original Xbox was launched, critics were skeptical that the game console would stand a chance against video game veterans Sony and Nintendo. However, Microsoft proved them all wrong by making the Xbox one of the most popular devices in the gaming industry.