ZTE exec reveals how much the company pays Microsoft for each Windows Phone license

ZTE exec reveals how much the company pays Microsoft for each Windows Phone license
During the launch of the company's Windows Phone, the ZTE Tania, a company executive has seemingly disclosed the closely-guarded secret of how much one WP mobile operating system license costs manufacturers.

The ZTE exec Santiago Sierra said they are giving Microsoft between 15 to 20 pound sterling for each handset, which is why Windows Phones are going to be more expensive for the company to make than their Android handsets. That translates to $23-$30, and is upwards of what Microsoft was getting for Windows Mobile licenses, which were widely believed to cost around $15.

Microsoft works with mobile much the same way it works with computer OEMs - you pay it a license fee to use the operating system, and in turn get compatibility, support, and, increasingly important, you are guarded against lawsuits, as Microsoft is one of the largest patent holders from the companies that dabble in mobile.

Of course, everything in the UK is more expensive. We kid, but it's a brand spanking new mobile OS with a lot more capabilities than WinMo, and ZTE is probably not paying what the bigger players like Nokia pay to Microsoft, but still, this license must be one of the most expensive components in a Windows Phone handset.

Not to mention how much money Microsoft is raking in from licensing its patents to Android phone makers, rumored to be in the vicinity of $5-$15 per device, even from stalwarts like Samsung and HTC. Well, Microsoft might not be a big player in mobile yet, but it might as well make from the industry more than what Google is currently making with Android.

The announcement of the Windows Phone Tango version at MWC next month, which will be meant for entry level WP handsets, might see this license fee drop in price, but we'll see if the full functionality changes for Tango devices.

In any case, if we ballpark a Windows Phone license to cost about $25, which is at the low range of what the ZTE exec is saying, Microsoft still needs 40 million phones sold to recoup its initial investment to develop and market the platform, said to be north of $1 billion, and there are only about 8-9 million currently floating around.

source: TR via WMPU

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7 Comments

1. GeekMovement unregistered

hope microsoft keeps improving their OS i'm very curious about the nokia window handsets, but still glued to android and with sony coming out ooh it will be tough!

2. Martine

Posts: 102; Member since: Oct 20, 2011

Sorry but Microsoft is NOT the "World Largest Patent Holder". Far from it. Next time, just do some Google search before posting bogus. thanks

5. T00muchF00D

Posts: 98; Member since: Nov 27, 2011

Yeah you can't read. He never said "the worlds largest". TROLL.

3. Daniel.P

Posts: 127; Member since: Jul 14, 2011

Yes, thx, it's 6th worldwide as of 1.16. It has the most patents from the US mobile operating systems companies tangled in lawsuits was on the back of my mind :-)

4. MickDM

Posts: 63; Member since: Nov 29, 2011

oh, daniel, i so like your refreshing "less-biased" reporting style... but, "only 8-9 million currently floating around", really? i am inclined to believe that is a little more significant considering how things have been playing out in the mobile market while MS figured out how they were going to compete... i personally consider the fact that they have come anywhere NEAR 10 million in such a short time of "truly commting" to compete a feat worthy of a little less skepticism/doubt... as they say i think it's time to "give them props"... don't you?

6. Daniel.P

Posts: 127; Member since: Jul 14, 2011

Right, I used "only" just to emphasize that there is still some way to go until MS recoups its Windows Phone investment in licensing fees. Actually, about 10 million devices is a pretty impresive feat in its own, as that's the cutoff some large app publishers have said they will wait for to jump into developing for WP. And with the Lumias launch, growth should start really accelerating this and next quarter...

7. MickDM

Posts: 63; Member since: Nov 29, 2011

i thoroughly agree w/ that perspective when concerning licensing! thanks for clearing it up... :)

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