Is Microsoft making money from Windows Phone???

[runamuck83]

I'd honestly like to know. Because that will tell me if they wont let it flounder and die.

 

[a5cent]

No. Their WP efforts operate at a loss of a couple hundred million each quarter. If you think you can derive anything about WP's future from that you'd be mistaken however.

Android doesn't earn anything for Google either. Google have spent billions on Android development, with no direct returns to show for it. You think Google will stop anytime soon too?

Currently, the competition in the smartphone OS space is about market share and control (technology and the ecosystem). It's not yet about profits.

 

[snowmutt]

MS is about 2 things: Software and market presence. WP gives them an inroad to both. There are so many advantages for the future of the company to being a strong OS provider. There is zero advantage to bailing on WP at this point.

Buy with confidence. WP is gonna be around for as long as the cloud and software MS is banking on is in their future plans. You know: For-near-forever.

 

[SnailUK]

No. Their WP efforts operate at a loss of a couple hundred million each quarter. If you think you can derive anything about WP's future from that you'd be mistaken however.

Android doesn't earn anything for Google either. Google have spent billions on Android development, with no direct returns to show for it. You think Google will stop anytime soon too?
.

Surely the fact almost everything on Android is free, with Ad support means google get every penny back in advertising. They can also gain huge amounts of value from the usage data they get back from all the Android phones.

 

[a5cent]

Surely the fact almost everything on Android is free, with Ad support means google get every penny back in advertising. They can also gain huge amounts of value from the usage data they get back from all the Android phones.

Google earns money by presenting advertisements to users. However, the Android OS and bundled apps have very few channels through which to show advertisements (currently) so it doesn't generate income like YouTube or Search does. Revenue from app embedded advertising goes to the app developers, not Google.

You are obviously correct that the behavioural profiles Android helps create are 'valuable', but a profile doesn't make money either. It's valuable as a tool, which Google invests in, just like a carpenter might invest in new powered saws.

The Play Store is Google's best Android related money maker, but that doesn't cover development costs. Nobody outside Google HQ knows the exact numbers, but the finance world is unanimous in that Android loses Google a LOT of money.

 

[Harry Wild]

No! Microsoft now is giving away the licenses to phone manufacturers now.

In addition; Nokia's Lumia phones are priced at cost or even below to get market share at the low end. But look at Microsoft Surface devices; they lost a lot of money too and still getting produced. Phones are a much bigger market and Google Android has 82% of the total market! Apple has about 13% and Windows has about 3%!

In the U.S.; Microsoft/Nokia is trying to use exclusivity deals with U.S. carriers to "push" it Windows phones; but the retail sales staff is turning the leads into either Android or iPhone sales for the most part. Windows Phone display models are in some stores keep in the stock room and never displayed in the show area.

 

[gwinegarden]

Companies often sell items, at cost or below, for various reasons. One example is consumer printers. They sell them dirt cheap and make a ton on the disposables, like ink.

 

[eusty]

When they started with the Xbox they sold it at a loss for ages, and it's still here. I guess they make a profit now!

 

[byobg]

Windows 1.0 lost a ton of money. Windows 2.0 lost a ton of money. Windows 3.0 lost a smaller ton of money. Windows 3.1 made a profit. Windows 95 took over the world.


Not that I expect Windows Phone to take over the world - but Microsoft has been known to play the long game before.

 

[jsooney]

There's more to it than just making money directly from sales. There's a lot of value in tracking peoples locations, having access to their data in the cloud, as well as knowing many of their preferences. It's very handy for marketing and other purposes. Also, if they can tie it more effectively into their desktop/laptop OS there's a benefit there. I'd be very surprised if they dumped it, particularly given the shrinking desktop market.

 

[Anglerdk]

Don't think WP was meant to be profitable at first. It is all about the eco system. If all the android users started to use chromebooks, Gmail, google docs then there will be less sales of windows, exchange, office and so on...

How many have not bought a MacBook because they have an iPhone / iPod ?

 

[s2mikey]

I hope they eventually make money though. I get the whole "capturing market share" concept but at some point you have to turn a profit somewhere in the chain. I really like WP and hope it does get going enough to be a legitimate player in the cellular field.

 

[psoham777]

If Nokia & Microsoft focus on budget friendly phones, then it would increase the sales of Windows phones! I hate apple for the fact that it makes huge profits & never gives a budget friendly phone, all iPhones look almost the same! Here in India, iPhone 5S starts from ₹55000 & goes uptil ₹ 70000 whereas it's production price is only ₹11700! That's a huge profit even if an iPhone fails in the market! Also android has many problems, even the worst companies have android because its an open source OS! Also, I have an iPod but not a MacBook, & believe me there are many who have an iPhone/iPod but not a MacBook!

 

[Alex Rodriguez Jr.]

If Nokia & Microsoft focus on budget friendly phones, then it would increase the sales of Windows phones! I hate apple for the fact that it makes huge profits & never gives a budget friendly phone, all iPhones look almost the same! Here in India, iPhone 5S starts from ₹55000 & goes uptil ₹ 70000 whereas it's production price is only ₹11700! That's a huge profit even if an iPhone fails in the market! Also android has many problems, even the worst companies have android because its an open source OS! Also, I have an iPod but not a MacBook, & believe me there are many who have an iPhone/iPod but not a MacBook!

You're mad because a company makes money? Do you believe they should make less profit to cater to those who can't afford their phones?

 

[a5cent]

You're mad because a company makes money? Do you believe they should make less profit to cater to those who can't afford their phones?

Yeah, makes zero sense. The genius of Apple is their ability to sell phones that cost $130 to manufacture for $700. As long as enough people are willing to spend that type of money on iDevices, Apple would be stupid to sell their devices for less.

Personally, I don't think MS will ever make money with WP. Eventually, all three big OS companies will just come to see their mobile OSes as tools they must invest in for their other businesses to remain relevant. For Apple it's device sales, for Google it's their ability to create better behavioural profiles of their userbase, and for MS it's to sell software to businesses.

 

[tgp]

The genius of Apple is their ability to sell phones that cost $130 to manufacture for $700. As long as enough people are willing to spend that type of money on iDevices, Apple would be stupid to sell their devices for less.

Indeed! One thing I learned early on in life is that any given product's value is whatever someone is willing to pay for it. Its value has little to do with the cost of production. Retailer price their products at what they feel is the best balance between sale price & volume.

Microsoft is currently losing money on WP because the cost of production is higher than the market is willing to pay. Apple makes a profit because the cost of production is lower than the market is willing to pay.

 

[psoham777]

You're mad because a company makes money? Do you believe they should make less profit to cater to those who can't afford their phones?

Apple is making huge profits, but that won't be the case for long! If you see the smartphone sales, it has not increased, instead it has dropped! That's because apple is a stubborn company with a stubborn OS! People who buy an apple product eventually turn to Android or some other product! Reasons? No micro sd card support, no USB port in iPads, 4" screen of iPhones, also compared to other brands, apple gives a very short battery life! Android is highly customizable & hence its sales are still increasing! & also apple is always the one to raise the bar of smartphone price, always! It raises the bar so high that other companies also raise the price thinking that their high end phones are also worth a good price & this has been the case for so many years from the day iPhone was invented!

 

[DavidinCT]

sigh, this discussion again. Microsoft does not make anything off Windows Phone at this point, this is meaning the OS. Where they DO make money is off ads and Apps.

It is in Microsoft's best interest to push WP to more devices and higher sales as this will lead to more application/ad sales and that is where Microsoft will make a LOT of money (I think it's 20% on app sales or something like that).

It's like on Xbox Consoles, I know the 360 came out, it was costing MS somewhere around $500 to make, but, it was retailing for $399. They know they wont make a lot on the consoles(same with Sony and same with Nintendo but, that is for a different discussion), where they make all their money on Xbox is software sales.

So, it's all about the software....In the long term, that is where they will see all their money. Microsoft is not the type of company to release something and if it does not work out in 2 years, to dump it, they are in it for the long haul, Windows Phone is not going anywhere any time soon (as going away).

 

[Jas00555]

Currently no, but they said that they expect WP to break even some time in fiscal 2016, so there's that.

 

[Kaushik Dash]

Apple is making huge profits, but that won't be the case for long! If you see the smartphone sales, it has not increased, instead it has dropped! That's because apple is a stubborn company with a stubborn OS! People who buy an apple product eventually turn to Android or some other product! Reasons? No micro sd card support, no USB port in iPads, 4" screen of iPhones, also compared to other brands, apple gives a very short battery life! Android is highly customizable & hence its sales are still increasing! & also apple is always the one to raise the bar of smartphone price, always! It raises the bar so high that other companies also raise the price thinking that their high end phones are also worth a good price & this has been the case for so many years from the day iPhone was invented!

Man... that's some flying class bull****.