Microsoft has a lot riding on the launch of Windows Phone 7. And it looks as if they're ready to put some serious cash to help insure its success.
According to Jonathan Goldberg, a telecommunications analyst at Deutsche Bank, Microsoft is prepared to fund initial marketing, development and manufacturing subsidies with as much as $400 million. Goldberg stated, “This is make-or-break for them. They need to do whatever it takes to stay in the game."
In a recent visit to Microsoft, Goldberg said company executives told him that along with carrier and manufacturing partners, Microsoft would likely spend billions in the first year for Windows Phone 7 marketing and development. While these numbers are high, Goldberg estimates that Verizon, Motorola and Google spent $100 million to market the Droid line of Android phones.
Microsoft will definitely have some ground to catch up in the smartphone market. Google's Android has gotten a healthy corner on the market releasing what seems to be a device every other week. Apple's "antenna gate" appears to have faded quickly into the sunset with the iPhone 4G sales not missing a beat.
But will $400 million do the trick? The obvious answer is, "if it's spent right." Windows Phone 7 preview units were well received so it is unlikely that the software will be a complete dud. The big three of WP7 manufacturers (HTC, Samsung, and LG) are working on a few, "not too shabby looking" devices, and software development is building up steam.
The funding will definitely help all of these efforts. Hopefully some of the funding will be left over to help the consumers at the cash register when the time comes to actually buy a Windows Phone 7.