Microsoft: Smartphone prices to be cut in half in 2012

If you have really wanted to buy some kind of mobile smartphone but think that the prices are just too high compared to a regular mobile phone, the head of Microsoft's Windows Phone 7 division says that prices will be going down by as much as half by 2012. Currently the average price of smartphones are around $200 (with a new two year contract). In a speech today at Microsoft's Worldwide Partner Conference, Windows Phone president Andrew Lees predicted that by the end of 2012, " ... a smartphone that can run something like Windows Phone 7 will actually be down to $100 to $150. So, you're seeing a dramatic price reduction."

Lees also talked about having "a unified ecosystem" for PCs, tablets and smartphones, saying, "We are aiming to provide coherence and consistency across the PC, the phone, and the TV, particularly with Xbox. That's through providing new types of scenarios, things like the way in which we make the user experience more common ..."

However don't expect a version of Windows Phone 7 to show up on any tablets like Android and WebOS have done. Lees states, "We view a tablet as a sort of PC. We want people to be able to do the sorts of things that they expect on a PC on a tablet, things like networking to be able to connect to networks, and utilize networking tools, to get USB drives and plot them into the tablet." The Build conference in September will see Microsoft reveal more about how it will combine the best of the PC and the tablet.

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What they problably mean is that the hardware requirements for WP7 to run smoothly are so low that there'll be a new wave of inexpensive ones coming out.

NXTwoThou said,
What they problably mean is that the hardware requirements for WP7 to run smoothly are so low that there'll be a new wave of inexpensive ones coming out.

Exactly. It's not Android that needs a dual core to not stutter...

It's not the price of the phone, it's the price of the damn monthly fee. And if MS is serious about moving along here, they need to do what they do best, sell stuff that is just as functional as the other guy for less than half the price. And while your at it, HURRY THE F UP!

Gaara sama said,
M$ smartphone it should be free

1987 was a long time ago. Time for the long overdue retirement of the M$ moniker wouldn't you say?

Can't help but lol. Only since forever here have you been able to get ANY phone (including the samsung SGS2 i just got) for free upfront on a contract.

ambushed said,
Can't help but lol. Only since forever here have you been able to get ANY phone (including the samsung SGS2 i just got) for free upfront on a contract.

That's becoming less and less common (In the states at least). Especially for smart phones...

This is a good move ,but I believe Microsoft will be able to supply both the low end and high phones.Especially with phone maker Nokia.I live outside US so any way to get more people to use this is good.

Varoon said,
This is a good move ,but I believe Microsoft will be able to supply both the low end and high phones.Especially with phone maker Nokia.I live outside US so any way to get more people to use this is good.

I think MS should release a stripped down version of WP7, it's not heavy or at least it looks like if it weren't, with support for 3 languages, basic Zune functionality, etc...

I already took HD7 for around 880USD, in Feb this year. Only to know that 2 month later they droped the price to 720USD. I still think its over priced should be within 550 USD range.

I could see a HP Palm Pre 2 (outgoing model) cut down to £140 on Amazon.co.uk. A nice last year model, brand new in box. The phone is not tied in contracts, and is a nice little piece of kit.

It's webOS, but if Windows phones follow suit, it could change this market forever!
I already have read the prediction that Androids will (by consequential cutting prices) occupy the low-end market. And Windows phones have a great opportunity to displace Apple's offerings out of a higher end, too. I say the grim domination of Apple with it's OiPhones and £400-600 prices (which its loyal fanbase are happy to pay every year!) for a bleeding *mobile phone*, should end.

The Sat Navs also used to cost £300-£500 one day... what now? Lots of great sub-£100 devices, and even the most expensive ones with loads of features cost £200 something. Same way it should be for mobile phones, which are not much different piece of kit from a Sat Nav.

So I have my high hopes for WinPhone to smash the monopoly of expensive "grid of icon" iPhone-cloning handsets. And their prices cartel, which so far still consider it acceptable to charge nearly £500 for an iPhone 4 32GB... and lookalikes... even more with 24 months expensive contracts where it's supposedly "FREE" but in fact you can end up paying £1400 for your mobile and calls for 2 years... FREE my aRRRse.

A high-end smartphone (around 600$), or in general any device, keeps cutting his price every month,

Half a year ago, an HTC Trophy was priced about 500$, now u can buy for less than 300$. If an HTC Trophy is capable to run Mango without problems, u can have a good phone for about 250$ this fall.

I remember when I have a Nokia 3210,(ten years ago and about 150$, don't remember) my boss had a Nokia Communicator, they was priced about 1,000$.

Saying that in a year and a half good smartphones will cost 100$ less than now is more than obvious.

Pepeda said,
A high-end smartphone (around 600$), or in general any device, keeps cutting his price every month,

Half a year ago, an HTC Trophy was priced about 500$, now u can buy for less than 300$. If an HTC Trophy is capable to run Mango without problems, u can have a good phone for about 250$ this fall.

I remember when I have a Nokia 3210,(ten years ago and about 150$, don't remember) my boss had a Nokia Communicator, they was priced about 1,000$.

Saying that in a year and a half good smartphones will cost 100$ less than now is more than obvious.

Not to sound like a troll, but I'm inclined to believe that the reason behind WP7 cheap prices is the low demand. In Europe you can also get them unlocked cheaper than phones with android, even if they run similar hardware

I'd really like to see Windows Phone integration with Windows 8, but of course only as an option for people that choose to invest in Windows Phone, and an opt-in quality assurance PC program for OEMs, so Microsoft can probably avoid the antitrust stuff with the DoJ, EU, Korea, etc.

I'm think a designation for special 'quality-build' computers that are optimized for the best Windows 8 experience (like the PCs they sell in Microsoft stores) and integrate easily with Windows Phone and Xbox/WMC. Like an NFC chip on the side of computer displays to share content when you tap a Windows Phone device, minimum webcam lens quality, resolution, etc. I'm hoping to see anywhere from upper medium price range to extra pricey to accomodate a variety of PC users with the budget.

derekaw said,
A race to the bottom led my Microsoft

Why do you think the Nokia partnership is so important.

This IS their marketshare, Microsoft want it.

Mmmm I bought an HTC Wildfire for £180 off contract so these prices are already close, however it is best described as the Lada of the phone world and as such slightly tarnishes the Android reputation.

If MS want to fill a void then fair enough but I prefer to buy a quality phone/computer over a piece of cheap ****

this is very misleading. the price for a smartphone isnt going to be cut in half but rather reduced by $100 for people who are signing up a new contract. The actual price of smartphone are around 450 - 600 dollars without contract wont see a 50% reduction.

d4diesel said,
this is very misleading. the price for a smartphone isnt going to be cut in half but rather reduced by $100 for people who are signing up a new contract. The actual price of smartphone are around 450 - 600 dollars without contract wont see a 50% reduction.

Your comment is misleading. OEMs will be able to purchase components at volumes which is part of the reason for standardized hardware.
Now that production of source components is ramped up, prices will fall.

Phones will be cheaper, not just for contract owners, but for everyone, including OEMs.

You will be able to get a throw away smartphone within three years.

dotf said,

Your comment is misleading. OEMs will be able to purchase components at volumes which is part of the reason for standardized hardware.
Now that production of source components is ramped up, prices will fall.

Phones will be cheaper, not just for contract owners, but for everyone, including OEMs.

You will be able to get a throw away smartphone within three years.

+1 People really don't get economics of scale... With that said, as components continue to be improved upon, and that design is manufacturered less until ramped up, you're always going to have sales of some devices with the newest internals be expensive...

In Australia, one generally gets their phone for nothing upfront or for a small repayment per month on a plan. Perhaps your US carrier should pick up on this subsidized plan idea.

Douglas_C said,
In Australia, one generally gets their phone for nothing upfront or for a small repayment per month on a plan. Perhaps your US carrier should pick up on this subsidized plan idea.

they ARE subsidized in the US, otherwise they'd cost $500 upwards

Douglas_C said,
In Australia, one generally gets their phone for nothing upfront or for a small repayment per month on a plan. Perhaps your US carrier should pick up on this subsidized plan idea.

Actually, that's crap. With such gimmicks, people don't know the value of their phones, are bound to the carrier for 12 to 24 months, and continue paying for the phone even when that period is over, or feel compelled to buy a new phone and renew their contract.
What is more reasonable is for the carrier to offer the credit for the phone so that here would be a separate bill for the phone. The customer would know exactly how much his phone cost. And next to that, the communications bill, with little or no contract period so that the customer wouldn't feel trapped and wouldn't keep paying for the phone when he has finished paying his credit.

dismuter said,

Actually, that's crap. With such gimmicks, people don't know the value of their phones, are bound to the carrier for 12 to 24 months, and continue paying for the phone even when that period is over, or feel compelled to buy a new phone and renew their contract.
What is more reasonable is for the carrier to offer the credit for the phone so that here would be a separate bill for the phone. The customer would know exactly how much his phone cost. And next to that, the communications bill, with little or no contract period so that the customer wouldn't feel trapped and wouldn't keep paying for the phone when he has finished paying his credit.

Not entirely correct.
The cost of the mobile phone is shown as a seperate cost on the monthly bill.
In Australia, quite often the mobile handset is $0 upfront on a 24 month contract. It might be on a $79 plan, but then an additional $10 per month for the handset. Or maybe $10/mth on a $69 plan...etc
Sometimes if you want the phone on a $49 plan then you might have to pay $200 upfront and then $10/mth...etc

The phone t&c will always show the cost of the phone outright if you want to purchase it for a pre-paid.

24 mth contracts always have a minimum cost and seperate breakdown of the phone + plan costs

So the costs that this article is talking about will probably not have any affect in Australia

Got the Omnia 7 on a 12-month contract $49/mo ($49 'cap' of $550 which equates to about 500-minutes talk-time (or 2000 SMS)) from Optus (Optusforbusiness)!

LLTC said,

Not entirely correct.
The cost of the mobile phone is shown as a seperate cost on the monthly bill.
In Australia, quite often the mobile handset is $0 upfront on a 24 month contract. It might be on a $79 plan, but then an additional $10 per month for the handset. Or maybe $10/mth on a $69 plan...etc
Sometimes if you want the phone on a $49 plan then you might have to pay $200 upfront and then $10/mth...etc

The phone t&c will always show the cost of the phone outright if you want to purchase it for a pre-paid.

24 mth contracts always have a minimum cost and seperate breakdown of the phone + plan costs

So the costs that this article is talking about will probably not have any affect in Australia

A lot of people think they're getting the phone free when it's, for example, $0 upfront on a $49 24 month plan when actually you can get the exact same plan for, for example, $39 with no phone. It's marketed to make you feel like you're getting the phone free when it' actually included in the plan costs. I used to be misled like the mass population and only learned of the equivalent "no phone" plans because a friend started working in telemarketing.

Coolaaron88 said,
Bring on kick ass Windows Phones that undercut the Competition

At last! I can forsee Nokia's phones getting all the highlights (that they deserve to be fair - nice kit) but when the likes of ZTE are providing phones running Mango with only slightly less capability but a tonne cheaper then you are going to grab big market share.