Microsoft may spend up to $1 billion to launch its Windows Phone 7, according to a report in TechCrunch.
Citing an unnamed source familiar with Microsoft's manufacturer and carrier agreements, TechCrunch said the company will spend $1 billion on the Windows Phone 7 launch, half of that will be spent on marketing and the other half on development. The report also said that Microsoft's handset partners could spend "billions" more on their own marketing and development campaigns. A Microsoft spokesman did not immediately respond to a request for comment.
"We have a long-term view, and Microsoft has been in this position before in other businesses where we've had to take a long-term view," Greg Sullivan, a Microsoft senior product manager, told TechCrunch, while declining to comment on cost estimates. "The mobile phone market is growing by leaps and bounds, but it's still in the early stages."
Microsoft has a great deal riding on the success of the platform, especially after the high-profile flop of its Kin phones. Indeed, Google's Android platform and Apple's (NASDAQ:AAPL) iOS have eclipsed Microsoft's old Windows Mobile platform in the white-hot smartphone market. According to research firm Gartner, Android had 17.2 percent of the smartphone market in the second quarter, and Apple had 14.2 percent. Windows Mobile captured 5 percent of the market, down from 9.3 percent in the second quarter of 2009.
Microsoft has recruited a host of handset makers to support Windows Phone 7, including HTC, Samsung and LG. Microsoft is also expected to get strong carrier support. AT&T Mobility (NYSE:T) pledged in late July that it will be the "premier carrier" for Windows Phone 7. Other Tier-1 carriers are expected to support the platform as well.
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