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Microsoft Pri0

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March 17, 2010 at 3:48 PM

MIX10: How to make money with Windows Phone from Microsoft

mix10ap.jpgLAS VEGAS — Todd Brix, senior director of mbile platform product management at Microsoft, sat down Monday to answer some questions about how Microsoft and developers can make money on the new Windows Phone.

The phone is Microsoft’s answer to Apple’s iPhone, and the Windows Phone 7 Series is expected to start selling at the end of the year. When the phone launches, Microsoft wants to have a wide world of apps that would compel people to buy the new phone.

“What we would like is everybody to walk in a store and say I want a Windows Phone,” Brix said. “Just like today they say, ‘I want a PC.’ That’s a great model. It allows the user to have high confidence.”

How Microsoft will make money from Windows Phone:

The business model is similar to how Microsoft sells the Windows operating system. Microsoft will make the software for Windows Phones, and phone makers such as Asus, Samsung and LG will pay Microsoft a license fee for each device they ship. Brix said Microsoft has not announced license pricing yet.

Unlike in the past, Microsoft is also going to dictate some hardware requirements, such as touch-screen technology, a built-in camera and screen size. Microsoft will also build more of the software that phone makers have built in the past, such as the software that runs phone dialing and key input.

“We are taking more accountability for software,” said Brix. “So you can focus on development at the hardware level in a much more structured way. We think this has worked well in the PC model.”

How developers can make money from Windows Phones:

Developers can make money by building apps and selling them in the Windows Phone Marketplace. Microsoft will certify all apps before they are added to the app store. Developers can offer free apps, such as ad-supported apps; sell apps by the download like the iPhone app model; and a “freemium” model in which they could offer free-trial app with an option to buy an upgrade.

Developers would get 70 percent of the sales, and Microsoft would keep 30 percent. Phone users could either pay by credit card or through their monthly wireless bill.

There is nothing set up for a business to build corporate mobile apps for its workers. All apps would be downloaded through the Windows Phone Marketplace, which would be available to all users.

The model is not that different from Microsoft’s previous efforts with Windows Mobile 6.5. Microsoft says developers have built 1,400 apps for phones running that software. The problem is that those phones come in all shapes and sizes, so the developer has to build apps for many different phone designs. Google’s mobile operating system Android is now facing a similar problem. Apple’s iPhone succeeded with developers because they were building for one phone.

Microsoft is also touting that development will be familiar and fast. Developers who already build on Silverlight and XNA Framework can use the same platform to build mobile apps and games.

Developers who work for European wireless carrier Orange said at MIX that they like the new phone operating system, and that building apps is taking less time than it took to build apps for the old mobile platform.

“It’s really interesting, a fresh start,” said Andreas Saudemont, an Orange developer based in Paris. “The reaction is that it’s good that Microsoft ditched the old platform. They are trying to avoid fragmentation and having one chassis, one screen size, a known quantity of RAM.”

While Orange is continuing to sell Windows Mobile 6.5 phones, it “has few plans to continue working on new features” for the older operating system, Saudemont said.

Photo of AP app running on Windows Phone prototype courtesy of Associated Press

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