Microsoft reportedly offers $1bn to Samsung for future Windows Phones

With Microsoft's takeover of Nokia's devices business now more or less a done deal, questions are being raised about whether other manufacturers will continue to support the Windows Phone platform. At last count, Nokia's Lumia range accounted for an astonishing 90% of all Windows Phone sales, leading some to speculate that Microsoft's other hardware partners will turn their backs on it entirely, leaving the company to go it alone against rival smartphone platforms.

HTC, Huawei and Samsung were the first to join the company's 'rebooted' Windows Phone 8 offering, and they remain the only other manufacturers besides Nokia to offer WP handsets. Huawei recently launched its Ascend W2, but neither HTC nor Samsung have yet revealed firm plans for future devices with Microsoft's mobile OS. 

While HTC's plans remain unclear, Mobile Review's Eldar Murtazin today revealed some information hinting that Samsung may yet remain a Windows Phone partner: 

The suggestion that Microsoft may be offering a billion (dollars, we presume) to Samsung for its continued commitment to Windows Phone is significant, but not entirely without precedent. When Nokia joined the Windows Phone ecosystem, part of that deal included "platform support payments" of $250m per quarter - $1bn a year - from Microsoft as the Finnish company made its transition to WP.

Given the immense success that Samsung has seen with Android - and the negligible sales of its Windows Phone devices in comparison - the company has little motivation to continue investing in Windows Phone on the face of it. Against this backdrop, it would make sense that Samsung would be seeking some form of incentive from Microsoft to maintain its involvement in the platform, but at this stage, we only have Murtazin's word to go on. 

Intriguingly, this report follows comments made a few weeks ago by ZTE executive vice-president He Shiyou, who confirmed that his company - which previously manufactured Windows Phone 7 devices - would be returning to the platform with new devices next year. According to He, Microsoft executives visited ZTE, saying that the company is keen to "maintain a wide network of handset makers rather than simply make its own Windows phones." More significantly, He also mentioned that Microsoft had offered certain assurances and "clarifications" regarding the support that it will offer Windows Phone partners once the Nokia deal is completed. 

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That is a great move Microsoft, take the money that you already get from Samsung (i.e. Android patent licensing) and give them a small portion back as a carrot.

Samsung would be silly not to take the money and run. Surely they can produce and market a Windows phone well within a billion dollars, especially since they already had some running WP7. Even if it flops, whatever money is left over is just gravy.

It's all about brand perception. Apple and Samsung are hot names when it comes to smartphones. Microsoft isn't there yet. So they want samsung to help them push WP. Not surprising at all.

doubt this is true. Samsung doesn't want to be google's b1*ch and if MSFT makes windows phone free Samsung actually wants to have leverage and see WP, or anything else succeed. Otherwise Samsung will just have bend over to google which is increasingly aggressive towards their own OEMs and even competes with them with them thanks to their moto line.

it is in samsungs best interest to ensure they are dominant on all platforms but that there is more than one platform controlled by one company subject to one man....exactly the situation google wanted to avoid with apple it is now a reality with android. And given google's increase push to close android by essentially taking all the valuable parts of android out of the AOSP distribution, Samsung is running out of resources to remain independent.

more info here
http://arstechnica.com/gadgets...urce-by-any-means-necessary

so android isn't as much of a friend to Samsung as some people think, and WP is definitively the only alternative Samsung has other than forking android and risking the mob boss, google, scroogling them.

Why Samsung? HTC/Sony are producing better quality hardware compared to the cheap plastic crap that Samsung keeps on pumping out.

BajiRav said,
Why Samsung? HTC/Sony are producing better quality hardware compared to the cheap plastic crap that Samsung keeps on pumping out.

HTC can't compete with Samsung and it is in an increasingly deteriorating position. they bet on android and the bet went south. In other words HTC is what nokia would be if they had gone android: running towards unprofitability instead of towards profitability: unable to compete with the crowded cut throat market that is android under the giant that is Samsung.

BajiRav said,
Why Samsung? HTC/Sony are producing better quality hardware compared to the cheap plastic crap that Samsung keeps on pumping out.

Because if people see you carry HTC/Sony, no one will buy it.

Microsoft killed OEM support when they gave Nokia that sweetheart deal way before they decided to buy them. Besides money MS gave Nokia access to the WP code before other OEMs and allowed them to modify aspects of the OS that other OEMs could not. With such an uneven playing field it's no wonder OEMs have largely ignored the platform. No one wants to compete in a market that's rigged in favor of one competitor. Either MS want's to license the OS to OEMs in which case they should all have an even playing field or they want to make the hardware themselves (a la Apple) in which case they shouldn't expect OEMs to do anything beyond throwing the OS on existing (Android?) hardware.

chrisarmanix said,
well, MS seems to be losing market on mobile side hehehe, Samsung with Android is easy a winner

actually WP GAINED market share this quarter.

of course they're desperate. theres big money in mobile. no company isnt desperate to keep their position or to grow bigger. And whatever theyre doing because of this desperation seems to be working. they're about to overtake iphone in Europe, currently at 1/3 of overall sales of iphone , and the fastest growing mobile os ,showing massive gains every quarter.

vcfan said,
of course they're desperate. theres big money in mobile. no company isnt desperate to keep their position or to grow bigger. And whatever theyre doing because of this desperation seems to be working. they're about to overtake iphone in Europe, currently at 1/3 of overall sales of iphone , and the fastest growing mobile os ,showing massive gains every quarter.

That's not alot. "Fastest growing mobile os" is just a play on words. Going from 2% to 4% maybe 100%, but it's still extraordinarily very little.

Javik said,
So much desperation to keep wp relevant

LOL...you're right. How much money has been spent on advertising Windows products on tv commercials and product placements? Still Android continues to dominate. So Microsoft is spending 1 bil to Samsung to continue what they are doing? Unless Microsoft gives Samsung the ok to go under the hood of WP, I don't see Samsung abandoning their Android commitment at all...or even a little bit.

VictorWho said,

LOL...you're right. How much money has been spent on advertising Windows products on tv commercials and product placements? Still Android continues to dominate. So Microsoft is spending 1 bil to Samsung to continue what they are doing? Unless Microsoft gives Samsung the ok to go under the hood of WP, I don't see Samsung abandoning their Android commitment at all...or even a little bit.

and your problem is you don't want choice? Samsung making devices for more than one OS is a good thing for everybody. And android isn't by any means perfect, or even the apex of good. Its just popular since it is free, that is to change hopefully with WP being free and give users choice. unless you're afraid of choice....are you?

Zedox said,
And the problem with this is...?

some people want 1 os, controlled by the whims of one company, following the agenda of that company. why this is good is beyond me or why they think android must be all there is boils down to just sheer ignorance of history of how the consumer loses the less choices we have.

VictorWho said,

That's not alot. "Fastest growing mobile os" is just a play on words. Going from 2% to 4% maybe 100%, but it's still extraordinarily very little.

compared to iphone sales for example, going from 1/25 to 1/3 in the span of two years is not a lot? we can keep saying that it isn't a lot, but it starts compounding,then it becomes a lot. what happens when these gains become big enough that more and more OEMs want in on the action? gains then become exponential,and theres a snowball effect. that's what happened to android,and you're seeing history repeat itself.

VictorWho said,

That's not alot. "Fastest growing mobile os" is just a play on words. Going from 2% to 4% maybe 100%, but it's still extraordinarily very little.

And as far as I know, iOS and Android are still gaining marketshare. Where is WP taking marketshare from? BB? iOS? Android? WP being the fastest growing mobile OS is no big deal and really has not impacted iOS and Android much....if at all.

techbeck said,

And as far as I know, iOS and Android are still gaining marketshare. Where is WP taking marketshare from? BB? iOS? Android? WP being the fastest growing mobile OS is no big deal and really has not impacted iOS and Android much....if at all.

I don't know what island you are living on,but iphone has been dropping global share for quite awhile now,every quarter for at least the last year,and down overall yoy. windows phone is gaining.

I don't know what planet you live on but wp has already overtaken ios in several markets and is getting very close to overtaking ios in Europe, so yes wp is taking marketshare from ios on aglobal basis, again the world is not only living in the usa.

korupt_one said,
I don't know what planet you live on but wp has already overtaken ios in several markets and is getting very close to overtaking ios in Europe, so yes wp is taking marketshare from ios on aglobal basis, again the world is not only living in the usa.

You even read what I said? I didnt comment on WP marketshare percentage or mentioned any country.

I said as far as I know iOS and Android are gaining marketshare, was wrong about iOS, and then made a comment on where WP is getting its marketshare.

I don't see why Microsoft just dump the OEMs and go with their own devices being they now have Nokia.

What's the point of have all these OEMs for Windows Phone devices? Besides changing hardware specs there isn't much the OEMs can do to customize the OS like they can do with Andriod.

primortal said,
I don't see why Microsoft just dump the OEMs and go with their own devices being they now have Nokia.

What's the point of have all these OEMs for Windows Phone devices? Besides changing hardware specs there isn't much the OEMs can do to customize the OS like they can do with Andriod.

While I somewhat agree it's probably just to get the phones out to more people. There are a lot of people who "like Samsung phones" or "like HTC phones" and will pay a little more attention to phones from a brand they've used in the past or like.

But those phones are synonymous to Andriod more than they are Windows Phone. Yes people tend to go towards something they are used to but IMHO the Windows Phone ecosystem would be better served by one manufacturer, Microsoft.

IPhone is nose-diving because the OS from a perspective of delivering meaningful information to the home screen is non-existent. Yes Andriod is a juggernaut because it is saturated all over the place is sort of a good thing but this fragmentation of different devices and different versions is a pain point.

Apple and Microsoft has done it right so far; one OS for ALL phones. If Microsoft can release 3 phones; low-end, middle and high-end I think they will get some traction in the market possible taking over 2nd place.

interesting.... Would love to see what Samsung could come out with if they put a little effort behind it. Samsung Focus was a GREAT phone. My mother still uses it today..

vcfan said,
still salty from the nokia raid.

He said that MS was going to buy the smartphones division from Nokia. Besides the facts that companies gives " incentives" to other entities to use their products is nothing new.

InformedPoster said,
According to Eldar.. Nothing to see here folks.

I stopped reading at Eldar. Not a single thing this guy has said has ever been true. Astonishing that anyone would continue to report stories that a guy just makes up.

InformedPoster said,
According to Eldar.. Nothing to see here folks.

Lets assume that it is true - whose to say that the $1billion isn't actually in cash but Microsoft giving Samsung Windows Phone and Windows RT free of charge plus royalty free ability to use patents thus the whole package would be equal to $1billion? reminds me of the Nokia/Microsoft arrangement a few years ago when the numbers were broken down there wasn't all that much cash changing hands in the end.