ZTE pays Microsoft around $27 for every Windows Phone that they make

zte_tania

The ZTE Tania recently launched in the UK. It’s ZTE’s first Windows Phone and it features a 4.3 inch screen with the same 800 x 480 pixel resolution that all Windows Phones are required to have, 1 GHz processor from Qualcomm, 5 megapixel camera, no front facing camera, and that’s about it. There’s nothing really special about the Tania except for the price, which has yet to be revealed, but it’s expected to be rock bottom. Note that the Tania recently launched in France without any ZTE branding; SFR is selling it for 270 Euros. Anyway, what’s important here isn’t the device itself, but what we now know about the Windows Phone business model. The folks at TrustedReviews were at the launch of the Tania and they bumped into Santiago Sierra, Portfolio Manager for ZTE UK. He says that ZTE pays Microsoft between £15 to £20 for every Windows Phone that they make. Average those two numbers and you get £17.50 or $27.02.

That’s a lot of money, but you have to put that figure into some context. Android is free, but companies have to do all the integration work themselves, meaning they have to make Android run on whatever hardware they eventually want to bring to market. Microsoft on the other hand tells handset makers the exact specifications they need to have in order to make a Windows Phone, and then they give someone like ZTE not only the Windows Phone operating system, but all the drivers and associated code needed to make it run silky smooth.

Does Google’s model work better or Microsoft’s? That’s tricky since Google doesn’t make money on Android, at least directly. Google created Android to get more people browsing the web, thus viewing more Google ads, and of course to force people to use Google services. Microsoft on the other hand still views the world in much the same way that it did in the 80s, that they need to make money on a per license basis.

Judging by Android’s market share, it’s kind of obvious who won the “war of ecosystems” as Nokia CEO Stephen Elop likes to say whenever he makes a public appearance. Still, it’s early days and things can easily change.

[Image Credit: The Verge]

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