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  1.    #1  
    Hi all,


    take care,


    Itís Too Late for Microsoft To Build Its Own Handset
    By Kevin C. Tofel Jul. 29, 2010, 2:00pm PDT

    It’s Too Late for Microsoft To Build Its Own Handset

    Microsoft should be making its own handsets, says Peter Bright of Ars Technica. Licensing an operating system in the smartphone space doesnít earn much money, so I understand Brightís point. But the window of opportunity for Microsoft to build its own phone closed down the minute it said it would license Windows Phone 7 to hardware partners. The time to make the break from licensing a mobile OS and start making hardware has passed Microsoft by Ė at least until the next time the company decides to reinvent its place in the smartphone market, and even then it would bring challenges.

    Brightís description of the financial aspect of this situation I do agree with:

    There just isnít a whole lot of money in licensing a phone operating system like this. We donít know, because the information isnít public, just how much a Windows Phone 7 license will cost an OEM, but itís generally assumed to be a few tens of dollars. Even assuming $30 per unit (which from what I can tell is on the high side), Microsoftís partners would have to ship a whopping 30 million handsets to make this a billion-dollar business.The first question that comes to mind then is: why is it a good idea for Google to give away Android and a bad idea for Microsoft to charge a license fee? The difference is in the business model. Google wants to keep its core, lucrative business in front of every eyeball it can with search and advertising. By being the dominant search engine, Google gains key information on search preferences or how consumers think when they use the web to find information. And of course, those preferences are paired with contextually relevant advertisements, where Google earns the bulk of its revenue, which it then shares with handset makers who use Android. Simply put: Google doesnít need to charge for Android and if it did charge, that would add a barrier to adoption by hardware partners.

    On the other hand, Microsoft does have to charge for its platform because it only has a small segment of the mobile search market and therefore earns far less money overall on mobile advertising. And by ďsmall segment,Ē Iím probably understating the difference in both search and mobile search between Microsoft and Google. TechCrunch points out a Pingdom chart comprised of data from StatCounter, showing that Google owns more than 98 percent of the mobile search market. Microsoftís Bing is a blip on the mobile map, not even registering a half a percent.
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  2. #2  
    Solid business analysis.

    (business consultant here admirin' his analysis)

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