Microsoft to spend billions to woo manufacturers back to Windows Phone?

Microsoft

A number of recent reports have suggested that Microsoft is wooing manufacturing partners back to the WIndows Phone fold by offering various incentives. A story this summer suggested that Microsoft had asked HTC to offer smartphones with both Android and Windows Phone pre-loaded. Other reports suggested that Microsoft was also considering reducing or even completely dropping license fees and even offering financial incentives. Now comes word that these incentives could in fact top US$2.5 billion.

Mobile-review’s Eldar Murtazin, who has a fairly decent track record, today revealed how this would break down. Samsung would receive US$1.2 billion (up from US$1 billion in a previous rumour), Sony (with whom discussions are confirmed to be underway) US$500 million, Huawei US$600 million. A collection of “others”, possibly including HTC, would get an additional US$300 million. In exchange for this “support,” each manufacturer would have to develop as few as one handset each.

While Windows Phone’s global market share has yet to hit double digits, Nokia is the undisputed leader in this market and by some accounts dominates with a usage share greater than 90%. Its closest rival, HTC, own a mere 5.2% share (based on AdDuplex data provided to Paul Thurrott. With Microsoft about to swallow up Nokia’s devices division for US$7.2 billion, Windows Phone is running the risk of becoming a single manufacturer platform much as iOS is but without the commercial success to make it viable. Microsoft’s move would broaden its reach and give it further time to expand its market share to a point where manufacturers will no longer need financial incentives to build Windows Phone handsets.

Murtazin does not provide any details on how these “support” payments would work but it would likely take the form of subsidized license costs as well as marketing funds.