Microsoft's Windows Phone Marketing Will Cost $200 Million: Report

Microsoft will spend $200 million promoting Windows Phone to U.S. users in 2012, according to a new report. Windows Phone currently has minuscule market share.

Microsoft and its partners will pump some $200 million into marketing Windows Phone to U.S. customers in 2012, according to Paul Thurrott's Supersite for Windows.

"According to internal Microsoft documentation I've viewed, the total cost of this marketing tsunami is in the neighborhood of $200 million," he wrote in a Jan. 4 posting. "And, again, that's just for the United States." Among the initiatives: paying incentives to retail workers to push Windows Phone as an alternative to either Apple's iPhone or any of the Google Android devices flooding the marketplace.

"The amount of payments are $10 to $15 per handset sold, depending on the number sold, for some handset models," he added.

Windows Phone rumors have spiked ahead of next week's Consumer Electronics Show in Las Vegas, where Microsoft is expected to reveal far more about its plans for the smartphone platform. In late December, the blog WMPoweruser posted a purported Windows Phone road map, but declined to name its source.

If taken at face value, that document suggests that Microsoft will follow up its recent Mango software update with additional versions aimed at the midmarket, business users and the higher-end "superphone" segment.

The second quarter of 2012, according to the road map, will see the arrival of an update labeled "Tango," which will feature "products with the best prices." This likely means Windows Phones aimed at the midmarket, with a possible stripped-down user interface to match the lower cost.

That will be followed in the fourth quarter of 2012 with "Apollo," for which the road map offers three bullet points: "Increase overall volume," along with competitive "superphones" and "business." Based on that, one can infer that Microsoft intends the Windows Phone line to branch out yet again, targeting both the superphone (i.e., high spec) and business markets. The "increase overall volume" bullet point could allude to Microsoft anticipating more Windows Phone units in users' hands by the end of 2012, or else the hope that smartphones loaded with some sort of Apollo software update will kick off a higher volume of sales.

Despite the Microsoft brand name and phones from several manufacturers, Windows Phone failed to gain much traction with consumers in 2011. During his July 11 keynote speech at Microsoft's Worldwide Partner Conference, CEO Steve Ballmer described Windows Phone's market presence as "very small."

To counteract that, Microsoft has signed agreements with Nokia and other manufacturers to build new devices and market them aggressively. But with its market share still tiny, Microsoft will need to make a considerable effort if it wants to truly challenge Google and Apple for smartphone supremacy. If Thurrott is correct, the cost for that effort in the United States will total $200 million.

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