Windows Mobile 7 to be charged in the competetive Mobile S/W market

Earlier in the week, Microsoft showed off its attractive new mobile platform. The new operating system, Windows Phone 7 Series, promises a radical change in the world of Microsoft-powered phones, but one thing that remains the same, the company confirmed, is that phone manufacturers will still have to pay to license the software. With Android (and now Symbian) open source, and the BlackBerry and iPhone software not available to third parties at all, this means that Windows Phone will be the only major smartphone OS available on a paid basis.

With strong competition from Android—which costs manufacturers nothing—the decision to retain this policy has surprised some. All things being equal, a licence makes Windows Phone less attractive to manufacturers than a free platform, and coupled with the delay Redmond has suffered in bringing to market a credible alternative to iPhone and Android, Windows Phone could be starting at quite a disadvantage. Given that Windows Mobile is not believed to account for any substantial amount of revenue for the company, forgoing the licence fee would eliminate one Android benefit for little real cost to Microsoft.

That said, all things are not equal; Windows Phone offers a unique—and apparently high-quality—user interface, as well as built-in applications with no direct equivalents on other platforms. The handset manufacturers appear to have no qualms about licensing the current Windows Mobile platform, and the major manufacturers are claimed to be on-board with Windows Phone 7 Series too.

Further, those manufacturers then spend additional money developing and supporting custom front-ends for Windows Mobile phones. Such front-ends will be prohibited on Windows Phone, curtailing future expenses. Similarly, the improvement of the built-in Internet Explorer browser might similarly put an end to licensing and customization of third-party browsers like Opera (a common feature of many Windows Mobile handsets), further reducing costs relative to its predecessor.

As such, the decision is not so surprising after all. Many things stand in the way of Windows Phone 7 Series succeeding in the marketplace—like Microsoft's ability to deliver something fast, stable, and on-time—but a license fee is probably not one of them.