“Microsoft Corp., the world’s largest software maker, said its Windows Phone operating system will propel it past Apple Inc. (AAPL) in China’s smartphone market as its partners release devices costing as little as $158,” Bloomberg News reports.
“Passing Apple is an ‘interim goal’ as the company’s longer-term objective is to supplant Google Inc’s Android as the local market leader, Simon Leung, Microsoft’s chairman and chief executive officer for the Greater China region, told reporters in Beijing today. He didn’t give a time frame for reaching the targets,” Bloomberg News reports. “Microsoft’s manufacturing partners will ‘definitely’ offer devices in the price range of 1,000 yuan ($158), Leung said, without specifying which partners or devices would meet the target. Rather than make its own phones, Microsoft supplies software to handset manufacturers including Nokia Oyj, Samsung Electronics Co., HTC Corp. and ZTE Corp., Leung said.”
Bloomberg News reports, “A 16-gigabyte iPhone 4S costs 4,988 yuan at Apple’s online store in China.”
MacDailyNews Note: Currently, an 8GB iPhone 4 costs 3,988 yuan and an 8GB iPhone 3GS costs $2,888 yuan in Apple’s online store in China.
Read more in the full article here.
MacDailyNews Take: We shall see how well Microsoft meets its goals – and which company continues to lead the world by a large margin (pun intended) not only in innovation, but in revenue share as well.
Unit share leadership is one thing (any company that can afford it, can always just give products away in a quest for unit share). Revenue share leadership is quite another matter altogether.
Related articles:
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IHS: Microsoft’s Windows Phone to bump iPhone for second place in 2015 market share – January 19, 2012
Microsoft missed every major new technology, innovation, and great idea of the last decade – January 11, 2012
InfoWorld: Without a doubt, the best smartphone for business and pro users is Apple’s iPhone 4S – January 4, 2012
Not even considering Android or Windows Phone devices – December 27, 2011
Apple iPhones crushing Nokia’s multi-million dollar efforts – December 19, 2011
Lumia a loser: Brokerage firm slashes sales estimates on Nokia’s flagship Windows Phone – December 16, 2011
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Apple’s iPhone took 55% of global profits on 5% of unit sales in Q111 – May 17, 2011
How Microsoft’s Windows Phone ’07 can beat Apple’s iPhone in market share – April 9, 2011
So basically they are saying that because they will be selling cheap crap, they will sell more than Apple. BUT – he who makes the most profit from devices sold is much more important.
But hey, if it makes MS feel better.
I like their strategy, I like it a lot!
Yes, they want their OS on cheap crap. After all, they get paid for the software, not the hardware. It would make sense that they couldn’t care less about cheap handsets with little to no profit margins as long as they get paid for their software for each one of them.
From a $158 phone, how much of that does MS get? I’m suspecting less than $10. No wonder they have to make it up with volume.
MS has historically made a healthy profit from their OS licenses., they don’t care how much (or little) the hardware OEM’s make by giving the hardware away for next to nothing.
Do we know what the licensing fee is in this case?
If it is a healthy fee, then I can’t see too many handset makers rushing to produce phones with their platform if they can continue to get Android for less. If they make it really cheap, then that means they will have to have their partners move a LOT of devices to make any money.
To me, this just seems like delusional desperation. I guess we’ll see.
Looking forward to seeing more details about the licensing fees.
Similar, is Googles’ business strategy.
I figure that is why MS sees Android a bigger threat.
—
Apple beating Android in market share and performance of software and hardware is honest good competition.
Already happened and continues. The battle now is in Asia.
Apple defending its IP and forcing Android’s death is seen also as fair game. Both ways Apple still is winning.
Apple killing Google could help Microsoft but it helps Apple also.
Microsoft killing Android helps both Apple and MS making a new playing field for these two OSes to compete. Yet, Apple has not become weaker in market share nor in software. What does Windows 8 phone have… not much.
— Seems to Apple has the upper hand here.
Only from a financial point of view. Microsoft’s hardware is actually pretty good and they put strict standards on it, as opposed to the Android market, where everything goes.
De-lu-sion-al…
So they’re basically planning to fight against Android to become the McDonald’s of smartphone makers in China. Good luck with that.
I really want some of what they are smoking.
Yeah, Microsoft know what they’re talking about.
Even if they did what good will it do them? A load of cheap phones which they will earn next to nothing on, they’re welcome to them.
MS doesn’t make money on the cost of the phone. They make money from the license fee from the OEM’s and they make the same amount whether its a $500 phone or a $50 phone. IT’s the OEM’s that hurt, not MS.
Yeah, just what the rising middle class in China wants: a cheap knock-off of the world’s most popular smart phone. “Got me some real money now, so let’s be stupid with it!”
For once the MS product isn’t a blatant rip-off of Apple, they’ve done their own thing. Android, on the other hand …
Microsoft will turn a profit on their software investments by forcing the hardware manufacturers to lose money on every handset???
Micro$haft does it again!
The history will repeat itself and Windows Phone 8 Phone will outsell iPhone the way Zune outsold iPod. ROTFLMAO
In other news, Microsoft introduced their new logo today… a flying pig…
😉
More like lipstick on a pig.
More like lipstick on a pig.
Don’t say that. I hear the phrase, i see her face, I feel the nausea.
MS likely charges the same for the software license no matter how cheaply or expensively the phone is made. In this case, volume is all that matters. If they can do this it would be a real win for them, but not necessarily a loss for Apple. Both can win big. It is Android that is the loser if this happens.
you are right, and MS could win really big, since (as far as the OS is concerned) a shipped phone DOES equal sold software/OS. Even unsold crap phones sitting in the warehouse or a dusty Best Buy stock room, the OEM manufacturer of the unsold phone has already paid for the OS.
Isn’t it about time the press stop referring to Microsoft as the world’s largest software maker?
But its true. Microsoft software is the largest of its kind. Microsoft makes the most bloated, overweight, large, jumbo software out there.
You did mean “maker of — large software” right??
Brilliant analysis! You really understand the mind of Mr. Ballmer.
You poor SOB.
Microsoft always claims success before they even get out the door. It’s not confidence that causes this, it’s because they can never get reality to speak for itself so they resort to bragging and self aggrandizement.
Before the events transpire is the only time they can claim success and get away with it.
“Post fail ergo propter win”.
Correct if I’m wrong here, but I have NEVER, EVER heard Apple come out and made one of these hollow boasting statements in advance of some vapour-product/service. Apple always displays so much quiet class.
You’d think the competition would get a clue.
Yes, Apple says it AFTER they have done it. It seems like these other companies are trying to use the law of attraction to create their success. Ballmer should put down his copy of The Secret.
Steve Jobs and IBM’s vaporous 3.0 GHz G5…
The one who can sell the most at the cheapest price loses.
Remember the Zune Microsoft? You were set to take on the world with similar crap … or so you said. Those who don’t remember the past are condemned to repeat it.
Interesting…especially after reading this article….
http://mobile.slashdot.org/story/12/03/21/1549228/former-nokia-exec-windows-phone-strategy-doomed?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed: Slashdot/slashdot (Slashdot)
This should end up one iCal’d hilarious unrealized gross misprediction. Pride before another big MS fall. Boastfulness without any evidence of proof is not something Apple ever engages in. Remember the Microsoft funeral parade for iPhone back when? Turned out it was their own funeral they were attending. This may well be their second passing. RIP WP7.
“He didn’t give a time frame for reaching the targets,”
Hard to iCal a prediction when they don’t have the guts to set a date.
Just iCal the day of the boast is all, I guess today. And then wait until the evidence blatantly is obvious to the opposite and Windows Phone 7 is yet another failed MS stragedy, along with Bob. Bah-bye.
I don’t think Microsoft realizes how must animosity has been built up against them over the years (consciously or sub-conciously) and by how little they fostered and nourished a positive mind share. And now it’s come home to roost. Nobody will give them the benefit of the doubt anymore, except trollish ADD Fanboys.
What’s new? Microsoft is just buying marketshare at the expense of OEM partners.
Counting chickens long before they are hatched.
Greatest market share has always been Microsoft’s strategy. Putting their OS on the most devices possible. It worked for many years and would probably still work if not for Android (having no licensing fees is pretty hard to beat for lowest prices). I think this is what Wall Street also prefers and that’s why market share is always touted to investors. Overall user satisfaction on devices running Windows OS has never been Microsoft’s goal. I suppose that’s the hardware vendor’s responsibility. Having the highest market share was never Apple’s goal and Apple will merely have to settle for second best in market share which will be more than enough to keep the company financially successful.
One thing for certain, Microsoft has an awful lot of catching up to do in the smartphone sector. WP7 market share is pitifully low at this time.
Microsoft says a lot of sh*t…little of which is true.
Maybe they can come out with a Chinese version of their “Bargain Hunters” series of commercials.
Setting up another race to the bottom against Android. Seems some people don’t learn.
Looks like microsoft is harboring a bit of a prejudice about the tastes, inclinations, and desires of the chinese.
And they are dead wrong. Status (face) is EVERYTHING in China. They are just entering the “Conspicuous Consumption” era.
It’s the old “if you repeat a lie long enough and loud enough, some people will believe it”.
I’m always amazed at how the next [insert Apple product here] killer will be released in [insert timeframe here]…as if Apple is standing still.
So microslop thinks that the Chinese are so stupid that they’ll buy a cheap operating system on junky hardware. How ignorant is that. And racist as well. Doesn’t surprise me at all coming from the idiots at Redmond. Can’t wait to see how this plays out. Oh, but first they have to actually deliver an OS. Lol!
If Microsoft sells Windows Phones for 1,000 yuan then yes, they will sell a lot of phones. However, Apple will still make most of the profits, and the handset manufacturers will only continue to sell Windows Phones if they can make a profit too. Paying Microsoft for Windows Phone software almost certainly erases any profit from a 1,000 yuan phone, unless the phone is made so cheaply and with such crappy parts that no one will want it anyway.