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4/20/2012
08:59 AM
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Verizon To Push Windows Phone

The iPhone has high costs and lower margins for carriers. One approach Verizon will have to keeping more of the money is to push Windows Phone, where they retain more control as well.

In their earnings call yesterday, Verizon announced plans to push Windows Phone products as a way of countering the high cost of selling the iPhone.

Carriers typically subsidize the purchase of phones in exchange for the customer signing up for service. In the case of the iPhone that cost is about $400 according to various sources. This high cost has raised concerns among analysts, and Verizon's finance chief, Francis Shammo said in the call that one approach to offsetting the costs of selling the iPhone would be to promote Windows Phone, which is available on a variety of devices, generally of lower cost than the iPhone.

Verizon has had success selling phones running Google's Android OS, which presents similar opportunities.

Another difference between the iPhone and alternatives is that Apple sets all the design rules for the iPhone, including what can be preloaded on it, which is effectively nothing. Android phones are mostly built to the design specifications of the carriers who will sell them. Carriers can and do preload apps, including some for running added-cost services from the carrier, on these phones.

Microsoft exercises more control over phone design than Google, but they allow more freedom for carriers than Apple.

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