Microsoft hopes to cut Windows Phone 7 prices in half

One of the barriers surrounding smartphones is the price. Generally, purchasing a smartphone compared to a regular cell phone is much more expensive. However, those prices have been going down for the most part. Now Microsoft's head of its Windows Phone division has said that it expects the price to make a phone based on its mobile operating system to be about half of what it takes to make one today.

In a new Bloomberg article, Windows Phone head Andy Lees said the lower prices will come due to competition from smartphone parts makers such as processor maker Qualcomm. In 2010, it took $400 to make a Windows Phone 7-based smartphone. Now Lees says it takes about $220 to make such a phone. In 2012, he said, "We are supporting componentry that will allow us to go below $200." Qualcomm will be the exclusive maker of processors for Windows Phone 7 devices, according to Lees.

So far HTC and Samsung have officially announced plans to release new Windows Phone 7 devices based on the new "Mango" update to the operating system. All eyes will be on Nokia next week as it holds its Nokia World event in London. It's highly expected that Nokia will officiially reveal at least one, if not more, of its Windows Phone 7 devices which should start going on sale by the end of 2011. There have been lots of leaks about Nokia's upcoming phones but so far neither Nokia nor Microsoft has confirmed anything regarding these leaks.

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With all this talk about Windows 8 running on ARM, why would I buy a crappy phone OS when I can wait and get a desktop OS on my phone, soon?

SpyderCanopus said,
With all this talk about Windows 8 running on ARM, why would I buy a crappy phone OS when I can wait and get a desktop OS on my phone, soon?
As I understand it, Microsoft is not releasing Windows 8 for phones, just ARM and x86 (ie, tablets and bigger). Also, no x86 compatibility on ARM, so that's a big blow for some users. Besides, I don't think the Windows Phones have the muscle to run W8, anyhow - too little RAM and storage if nothing else.

Its a nice phone, though.

Wow, in my opinion, Windows Phones were already pretty cheap in the U.S. if you factor in carrier discounts. I don't think I've ever seen one above $200. I paid $100 for my HD7and got a second one free for my friend. I think 2012 is going to be a very exciting year for Microsoft products.

Mouettus said,
Lessen the cost?! What about profits?! Those wall street guys and CEOs deserve big big money!!!
/s

Communist.

Mouettus said,
Lessen the cost?! What about profits?! Those wall street guys and CEOs deserve big big money!!!

/s

As does my 401k! I make less than $25k annually, have already taken a beating on it, so they'd darn well better get their profits up! I'd like to have more than just Social Security when I retire (assuming its even around then)!

Mouettus said,
Lessen the cost?! What about profits?! Those wall street guys and CEOs deserve big big money!!!

/s

Likely profist would be similar to Android phones. if it takes $200 to make a device, and they sell it for $599, the phone maker only has to pay Microsoft for the license.

In Nokia's case, bec it is a partnership; Nokia likely wont have to pay for the license. Since MS made a deal with Sammie, likely they will get a discount cost on Windows licenses.

if it cost Samsung $200 to make a device and they get $600 for each sale, thats $200 in pocket, $200 to make another. Low profit margin per se. But Sammie makes most of its own parts and thus costs are likely lower, especially if they use parts they already are maming for others.

You have to consider a broader picture. And thanks to ANdroid, those cost are dropping even faster.

TechieXP said,
You have to consider a broader picture. And thanks to ANdroid, those cost are dropping even faster.
Yeah. The real money is in the contract for phone carriers anyhow - very few people buy phones unsubsidized. The proliferation of smartphones, I think, is directly linked to how profitable they are for the carriers and OEMs. Make it for $x, sell it for $y, and the carrier sells it for $z with 2-year contract, requiring a data plan, more than making up the money they didn't get up front.

This is great for "them" because they can offer the Window Phones at a variety of tiers, ranging from "entry level" to new and hottest. And, honestly, its great for us to have more selection from our carriers. Furthermore, the more these smartphone platforms are available on all carriers (rather than being exclusive), that means more selection for us since the best part of the phones are tied to a platform (apps, contact lists, etc), not a specific carrier.

<-- freak who bought a Samsung Focus WP7 at launch, unsubsidized, and is still loving it

if they are going make three categories of smartphones for poor and middle class and rich people then i guess they might win the competition as long as the quality of phone are solid as a rock

Phones all seem to be the same price these days, so if they can undercut their rivals by even £100 they've done a lot to win people over.