Seeking Alpha

Microsoft reportedly paying OEMs $2.6B in 2014 to make Windows Phones

  • Mobile-Review.com's Eldar Murtazin, who has provided some accurate Windows Phone scoops before, reports Microsoft (MSFT) will be making $2.6B in "support" payments (likely including marketing spend) to OEM partners in 2014 to compel them to make one Windows Phone apiece.
  • Samsung (SSNLF, SSNLF) is said to be receiving $1.2B, Sony (SNE) $500M, Huawei $600M, and other firms $300M.
  • If the report is accurate, it suggests Microsoft's Windows Phone investments could more than negate the considerable Android royalties it stands to receive this year.
  • It comes just as evidence appears Samsung is prepping a Windows Phone with a 5" 1080p display. The phone's inclusion of a 3G EV-DO radio (to go with a 4G LTE radio) suggests it could be sold by Verizon and/or Sprint.
  • Sony recently confirmed it's talking with Microsoft about making a Windows Phone. With Nokia's soon-to-be-acquired phone unit accounting for the lion's share of WP sales, Microsoft has made expanding OEM support a priority.
  • Update: A Microsoft exec denies the report.
Comments (10)
  • I hate to say it cuz I love my WP but if it doesnt gain some better traction in the next 2 quarters sounds like time to ditch it and embrace the android royalties... for free basically
    15 Jan, 05:43 PM Reply Like
  • What about NOK?
    15 Jan, 05:46 PM Reply Like
  • They bought the Nokia division.
    16 Jan, 06:21 AM Reply Like
  • just kill that pig
    15 Jan, 05:48 PM Reply Like
  • Interesting. So that’s somewhere around 15-20 million units. My bet is they can do better than that. The 2014 worldwide mobile device forecasts are coming in around 2.5 billion units. MSFT has a great opportunity in both Europe and Asia. Assuming forecasts are about right, that’s only 1% of the potential market. I think MSFT (Nokia) will have a separate lineup of Android devices. After all, they derive revenue from Android sales, too…
    15 Jan, 06:09 PM Reply Like
  • And India.
    16 Jan, 09:22 AM Reply Like
  • They make much more in incentive payments for OEMs to market Windows and have fore years. So do other companies. Ever wonder why the Intel Inside badge is on every magazine and TV ad for a PC? It doesn't compel anyone to do anything, it "incents" them. This is a non-story.
    16 Jan, 10:02 AM Reply Like
  • Well, in my opinion, Msft is out right now, buying marketshare for theyre OS.
    and.. why not use the Android royalties to boost theyre own sales, makes perfect sense to me.

     

    And who knows, is Msft/Nokia able, at this time, to produce smartphones x 2 or 3 on theyre factories, why not "buy" a little of the competitors workplace. win win windows. :-)
    16 Jan, 03:31 PM Reply Like
  • Imagine how much better they'll be if that money goes to fix their faulty software and make their own phones as they do with the 'surface'. There is a reason why OEM don't want to make their WP, but will they listen?
    17 Jan, 01:38 AM Reply Like
  • I see Windows Phone as more important than ever to MSFT. Not merely to hold a place in the mobile space, but to strengthen other Windows products by having continuity and connectivity across platforms (including Xbox). WP is performing very well outside US and I believe there is a great story to tell in the enterprise (high value) segment. MSFT just needs to articulate it well.
    20 Jan, 03:45 PM Reply Like
DJIA (DIA) S&P 500 (SPY)