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Steve Ballmer to Pay $230.00 Per Phone to Beat Google

Discussion in 'Android News' started by cereal killer, Jan 31, 2012.

  1. cereal killer
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    cereal killer DF Administrator Staff Member

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    [​IMG]

    As they say, success comes at a price, and Steve Ballmer is no exception to that rule. The question on investors minds was what was he willing to pay to beat Google and Apple at their game. Doing the math, that answer is now known, and it comes out to $230.00 per phone. Microsoft and Nokia are in a joint venture to gain market share for Windows phones in its battle with Google Android. Last quarter Microsoft payed Nokia $250 million and Nokia claims to have shipped 1 million units. It's not known how many units are still sitting in inventory but doing the math that breaks down to MS paying out $250.00 a phone. Part of the agreement stipulates that Nokia pays Microsoft a licensing fee for each phone it sells. The exact details of the license fee are not known, but some have speculated that it amounts to $20.00-$30.00 per phone. Essentially Microsoft payed Nokia $250.00 to receive $20.00 or $30.00. You see where this is leading? The Lumia 710 went for $50.00 on contract so it cost Microsoft $230.00 for that same phone that the customer just bought for $50.00.

    You're probably wondering what the heck is wrong with Microsoft and how did they get to this point. First off with $50 billion in cash laying around, paying out $250 million is chump change for the software giant. Secondly, Ballmer recognizes that Microsoft has fallen way behind and a big price must be paid to catch up. They find themselves in a very precarious position because their life or death falls on Nokias shoulders. That's not a great position to be in, but here they are. They are banking on the high end Nokia Lumia 900 to compete in the market and make an impact. The Lumia 900 was a hit at CES. It was the talk of the show and blogosphere favorite. The handset is packing a serious punch with its: 4.3-inch ClearBlack AMOLED 800 x 480 capacitive touchscreen, 512MB RAM, 8-megapixel camera with a 28mm f/2.2 Carl Zeiss lens (dual-LED flash), polycarbonate-body, with a single-core 1.4GHz Qualcomm Snapdragon. A bonus, but not the biggest bonus, is that the handset will be packing an LTE modem. The biggest bonus lies in the fact that the smartphone will be offered at a mind blowing $99.99 on-contract. That low price is truly a game changer. Similar spec'd Android phones go for $199.99 on-contract and we all know how consumers love a great bargain. The stakes are high, and if Microsoft successfully pulls this off, Google just may have something to worry about.

    Source: Forbes


  2. tjk629
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    tjk629 New Member

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    Personally I want to see WP7 rumble things up. Lord knows you won't be getting from RIM any time soon.
  3. combatmedic870
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    combatmedic870 Well-Known Member

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    I dont understand why they went with that processor.....if they wanted to make a rumble they should have went all out on a high end phone that people want and not on a high end phone that is....not. Ive heard great things about the OS and i bet it would have ran even better on a dual core second gen chip vs a gen3 single core snapdragon with an outdated 205 gpu.

    I bet the camera rocks on that thing though. I really am liking the look of the phone!
  4. ntrddragn
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    ntrddragn New Member

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    i dont think its the phone really, nokia phones are pretty solid. they have some of the features before android or iOS did. i think its the carrier. if we were truly in a free market where i can buy a phone and activate it on any network without contracts. i would grab me a nokia not to say i dont like my nexus. my old nokia 3310 took a beating and it was still ticking. :D
  5. npro1464
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    npro1464 Member

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    ...Can we flash Android over it? :icon_ devil:

    It looks like a pretty decent handset, but I'm just not sure consumers want the tile thing and another closed mobile OS (I know I don't). Nokia makes a decent product, it's such a shame that they didn't give Meego a chance, because the N9 looks like a great phone and might be perfect if it was able to access Android apps. Inevitably, I think we'll see them put out some Android handsets. I really dont think WP7 is going to pan out.
  6. tjk629
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    tjk629 New Member

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    Not necessarily.

    WP7 has a strict hardware requirement. I believe every single WP7 device runs a SnapDragon. My guess is MS won't allow dual core CPUs till they've made the OS takes advantage of it. For now anyways, a single core CPU is fine for WP7.
  7. gadgetrants
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    gadgetrants Well-Known Member

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    I'm pretty fond of the "commoditization of Android" theory, which in a nutshell is "make LOTS and LOTS of Android phones, in different sizes, colors, and prices, and flood the market with them":

    Android's branding paradox, and the fast track to commoditization | ZDNet

    We can't conclude it's the main reason behind Android's skyrocketing market share in the last 2 years, but I'm sure it's helped a lot. And sometimes we forget that the high-end glamor phones that release at $200 or $300 (on contract) are for early-adopters like us -- but I'd guess the bulk of Android phone owners don't get their phone the first week it comes out. They get it when it's 6 months old and costs a penny at Wirefly, or it's free at Amazon. ;) (Ever seen a 1-penny sale on last-year's iPhone?)

    Really, Microsoft "subsidizing" phone cost is pretty much the same strategy, and I have to say, if they can keep Win8 phones well under $100 with hardware that rivals $200 Android phones, it will be a successful strategy. Whether they take over or not remains to be seen (I doubt it...I mean...those TILES!!!...), but I'd predict this time next year, we'll be saying, "Wow, Windows phones have caught on more than anyone expected."

    EDIT: Regarding single vs. dual-core (from Wikipedia):

    Windows Phone - Wikipedia, the free encyclopedia

    -Matt
  8. johnomaz
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    johnomaz Well-Known Member

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    I've heard that WP7 phones are actually pretty damn good. The OS is great and the hardware works very well. I haven't used one and I like my Android but I have nothing against WP7 or iOS. I'd love to get a WP7 phone for work, but I doubt that will ever happen.
  9. brad92
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    brad92 New Member

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    My friend has a Windows Phone and its pretty cool. Its an HTC with slide out speakers.

    X
  10. cereal killer
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    cereal killer DF Administrator Staff Member

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    I predict this time next year Windows will be threatening to become a major player in the market. A few reasons why I believe this to be true. First, Nokia makes an EXCELLENT phone both in build quality and aesthetics. Secondly, the price point. Lastly, the $230 million Microsoft and it's partners are going to throw into advertising.

    As a side note HTC is also coming out with a stellar Windows phone. The Titan II is an awesome piece of equipment for $199. To rule Windows smartphones out entirely is something I cannot do in good faith.
    2 people like this.
  11. combatmedic870
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    combatmedic870 Well-Known Member

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    THIS.

    If there friend has one then they will get one. If there friend got one for cheap....even better. Word of mouth will be the biggest thing. I have a couple different friend "groups". Each one has either all Iphones or all android....its kind of odd. once windows gets that, then they shall make money...
  12. nikecar
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    nikecar New Member

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    512 memory? Bleh

    Sent from someplace, and with something that you need not worry about.
  13. eagle923
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    eagle923 Member

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    They are going to try exactly what Amazon is doing with the Kindle Fire. Go for the low ball price and try to break in. Even though $199 vs $99 over a two year smartphone contract is completely negligible, people don't think like that. $100 cheaper is still cheaper and it may tempt a lot of newcomers.

    It doesn't hurt that the WP7 OS isn't bad either. They have most of the necessary apps people would want and it works really well.

    I for one HOPE that it does do well. 3 competitors makes for better product. Look at IE6-8 when it had no competition and IE9 when Firefox and Chrome have really put out good products...
  14. Narsil
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    Narsil Active Member

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    Maybe if Ballmer paid me $250 and gave me the phone for free.

    Maybe.
  15. Big Ry
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    Big Ry New Member

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    Similar spec'd android phones go for $199 on contract? Yeah, maybe 1-1.5 years ago. Buy those same phones now and they'll be...free on contract. This is a joke, and I can't believe people (especially the news reporters here) are falling for it. WP7 is a solid OS, albeit boring, but fluid and reliable in my experience. But MS has yet to come up with a device, including this new lumina, that has a single feature that devices from last year didn't already have. Get with the program MS.

    Sent from my Galaxy Nexus using Tapatalk
  16. kodiak799
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    kodiak799 Well-Known Member

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    Am I the only one not getting that this "rivals $199 Android phones"? Maybe Android phones from 6-12 months ago, that now sell for like $50 (or for less on an Amazzon or Wirefly deal).

    Hardware is more or less a commodity now. You still need good hardware, but MS would have been better off sinking that money into app and software development. They have a chance to leverage Windows and Live! or whatever it is, and just don't seem to get it.

    Switching gears a bit - but related - seems like they dropped widget or gadget support for Win7. Again, they just don't get it.
  17. kodiak799
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    kodiak799 Well-Known Member

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    That's not what Amazon is doing. Amazon has a boatload of content they are trying to monetize by giving the phones away. MS owns no content and if that's their strategy, they'll fail.
  18. sweat90lx
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    sweat90lx New Member

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    my Win7 laptop cannot seem to connect to any device consistantly. phone, printer, or anything
    Nokia has made some great phones, but MS doesnt stand a chance in the phone market. UNLESS... the tents Ive seen lately with "FREE CELL PHONES" on them in the slums and dollar stores are giving them way
  19. Josefius
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    Josefius Member

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    I kind of think they will fail just as bad as they did in the phone market before, but that's just my opinion. We'll see I guess ;)
  20. blacksoxing
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    blacksoxing Member

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    Reading these forums make me chuckle

    I promise, here are the three reasons people choose a phone (I've sold aplently in my life...)

    1) It's cheap/free
    2) It's pretty
    3) My friend/family member has it

    THAT'S IT!

    Yall fine folks...yall always clammor about single processors vs dual processors and memory and qHD screens....

    STOP IT!

    This is why yall aren't marketing execs at these companies! Yes, there is a market for the super powerful phone...but if you notice, it's never marketed that way! If they speak about the Droid Razr, it's its thinness. If they speak about the Nexus, it's its Google features. If they speak about the Rezound, it's the earphones. Not their screens, processors, ram, locked bootloaders, open/closeness, etc....


    These Nokia phones are going to live or die by these few things:

    Is it pretty enough to buy?
    Is it cheap/free?
    Who is using it?????

    Case in point: You ever walk up to a normal iPhone user? You ever ask them why they have it?

    ....And when you can tell they don't know nothing they're bragging about...you ever ask them if the phone has 4G?

    Microsoft has a shot at making an impact, but only if consumers like how it looks, can get it cheap, and knows or seen someone using it (because only internet folk don't mind being the only people using it...)
    1 person likes this.
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