At $8-$15 per license they are charging, thats $16-$30M. They still have some ground to make up on the $1B or so dropped on the Kin. Does not seem like this can ever be a profitable business for them - especially compared to the $149-$499 they get per Office license.
$500M spent to buy Danger in 2008 plus assumption of debt and the $260M write down they later took on discontinuing the Kin in 2008. So probably around $.75B - that is still a ton of phone licenses they would need to sell to recoup.
And that isn't even taking into account the R%D spent on the Windows 7 phone, which they are said to spend $400M on marketing for.
If Apple was only selling OS licenses for the 14M iPhone4's it shipped at MS's price, they would only have made $112M-210M in revenue.
They're in this the same reason Google is... ad revenue. Money on licenses may be to help keep OEM skin in the game.
Related, but not quite the same, is something I learned at my first startup. Don't do enterprise pilots for free. Without some skin in the game the enterprise is a lot less likely to assist in making the pilot work. When there's even a small fee, they seem to be a lot more willing to view it as something they also need to make work.
Well, there's a 30% cut of the Marketplace sales but that's not going to amount to much as well.
However, they're building out a platform and asking for profits with the first quarter of sale is too much.
Microsoft always plays for the long haul, think about initial versions of Windows, XBox. On Xbox lost a ton of money initially but now is definitely profitable and making back the money spent.
Investing in Windows Phone is better for MS than just sitting on tens of billions of cash. It's good for us because it fosters competition even if you use other platforms. With your kind of thinking, no project would even get a start.
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At $8-$15 per license they are charging, thats $16-$30M. They still have some ground to make up on the $1B or so dropped on the Kin. Does not seem like this can ever be a profitable business for them - especially compared to the $149-$499 they get per Office license.
> They still have some ground to make up on the $1B or so dropped on the Kin.
Did they really spend $1B on the Kin? Do you have a breakdown on what they spent that much money on?
$500M spent to buy Danger in 2008 plus assumption of debt and the $260M write down they later took on discontinuing the Kin in 2008. So probably around $.75B - that is still a ton of phone licenses they would need to sell to recoup.
And that isn't even taking into account the R%D spent on the Windows 7 phone, which they are said to spend $400M on marketing for.
If Apple was only selling OS licenses for the 14M iPhone4's it shipped at MS's price, they would only have made $112M-210M in revenue.
http://gorumors.com/business/microsoft-kin-revenue-loss/6154... http://techcrunch.com/2010/08/26/microsoft-half-billion-doll...
One report says Microsoft spent $500 million acquiring Danger as part of the Pink/Kin project. http://gigaom.com/2008/02/12/how-much-did-microsoft-pay-for-...
They're in this the same reason Google is... ad revenue. Money on licenses may be to help keep OEM skin in the game.
Related, but not quite the same, is something I learned at my first startup. Don't do enterprise pilots for free. Without some skin in the game the enterprise is a lot less likely to assist in making the pilot work. When there's even a small fee, they seem to be a lot more willing to view it as something they also need to make work.
Well, there's a 30% cut of the Marketplace sales but that's not going to amount to much as well.
However, they're building out a platform and asking for profits with the first quarter of sale is too much.
Microsoft always plays for the long haul, think about initial versions of Windows, XBox. On Xbox lost a ton of money initially but now is definitely profitable and making back the money spent.
Investing in Windows Phone is better for MS than just sitting on tens of billions of cash. It's good for us because it fosters competition even if you use other platforms. With your kind of thinking, no project would even get a start.