Train wreck said:
Lastly, Microsoft is in complete control of the Windows Phone ecosystem and makes money on the OS license, app store, search, advertising exchange.. --Can you please link me a financial statement where Microsoft has many any money on any of their online (bing, ad revenue) or windows phone ventures? I and the market would like to know. Of course I and the market know that microsoft lost $458 million dollars in their online services division last quarter, so what ever you write is not true. Kin cost them a billion dollars, they overspent for skype (8 billion) and aQuant (6+ billion) now they are giving Nokia 1+billion (dont even know what the true amount is... undisclosed special access, development assistance, comarketing and social advertising) and nokia still cant give the phones away. $15b in 5 years and nothing to show for it. Overspending, underdelivering. It makes absolute business sense to give the largest phone OEM in the world financial compensation in order to have them push their ecosystem --I dont see how its possible for there to be windows phone 7 on the the 90+ million dumbphones that nokia sold last quarter. Their smartphone business only shipped 19.6 million smartphones in Q4 (and falling of course), how many of those are windows phones? We dont know. Mr. Elop is too embarrased to publish the actual numbers and this will be the last year that Nokia will be the largest cell phone OEM as Samsung will easily pass them in 2012. So all and all, Microsoft cant save Nokia and Nokia cant save Microsoft. Nokia was a company that rested on their laurels and have been outclassed by both Americans and the Koreans and Microsoft is desperately trying to mimic the monopoly profits that Google and Apple enjoy in their respecitive business and is failing on both account. They think they can buy their way to marketshare, its not working. Thei NOK/MS relationship is going to put strains on Microsoft attempts to get more carriers and manufacturers on board and to retain them as those vendors are going to want similar terms that Nokia gets from Microsoft (Im sure ZTE is non too happy they have to pay $27 per a WP7 license when nokia gets a free ride), especially if they phones dont sell (and of course they are not,) Dont know why you listed sony, they are not out begging for a billion dollar a year to keep their business afloat. |
Its quite funny cause your post sounds like all of the negative microsoft articles I've read on Engadget in the last 6 months combined.
All this anti microsoft ranting yet their stock is highest its been in over 10 years with most analysts predicting it will go much higher by the end of the year.
Microsoft may have not made any money on mobile in the last 3 years but its an industry they have to be in so they really have no choice. They could have done a hell of a lot worse than Nokia in subsidizing OEMs. Once you take apple off the table, there aren't many OEMs that can do what Nokia does. Nokia makes stellar hardware...just compare the Nokia Windows Phones to any Japanese, European or Korean made phone. Nokias stand out as a quality product which is what Windows phone needs. And considering that windows phone runs smoothly on low specs, and soon to be lower with Windows Phone 8, its not hard to grasp that in a year or 2 Nokia will be able to push 149 dollar smart phones as dumb phones to emerging markets running windows phone 8.
Speaking of profits, Google hasn't made much money on Android either. The difference between the two however is that once Windows Phone has a significant marketshare, it will be making significant revenue for Microsoft. More importantly, the ecosystem is under their control and they call the shots. Google already has a monster marketshare but the revenue they are pulling in from Android is miniscule compared to their marketshare. Furthmore, they have lost control of android and have to compete for revenue amongst other android devices. For example, Kindle fire...best selling Android tablet device but not a single Google service is used.
You mention the 27 dollar licensing fee (which hasn't been confifmed by anyone other than 1 guy at ZTE) but Android is just as expensive for OEMs. They have the pay the pattent fees to Microsoft as well as pay for developing and maintainging their own verson of android skin. Android version updates cost OEMs directly as well... All that is paid for with the licensing fee. So in essence it really isn't that expensive.
So all in all, Microsoft may have screwed up with Kin and Windows Mobile(and they have openly admited they did) but they did the right thing by subsidizing Nokias hardware and services. There is nothing laughable about losing money to get hardware in to peoples hands only to make more money in the long run on services and software...
