Monday, October 18, 2010

Microsoft Smartphone Strategy

I like Cringely's suggestion--much cheaper phones. But with smartphones, the TCO is what kills you--not the $199 vs $99 or even vs FREE. At $30/month and a 2-year contract, getting a smartphone for free still entails a $720 TCO commitment. Some form of lower-use plan has been long overdue.

Those are already coming--AT&T has a $15/month option, T-Mobile is rumored to have a $10/month option. But they have very low monthly usage caps (200 Mb/month). Maybe Microsoft could try to work a deal where it subsidizes the monthly rate, so that users get 500 Mb/month and a $99 Windows phone.

Another idea would be to let people trade-in the phone on a 12-month basis, instead of the usual 2 years. Not necessarily shorten the contract (carriers wouldn't like that), but give people full trade-in credit after 12 months, and extend the contract--carriers would like that.

Then turn the phone over to a used-phone market, as a FREE phone upgrade, with a re-set warranty. And let the people in the FREE/used category also get 12-month phone upgrades.

That would get a lot of Microsoft smartphones into the market.

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