Microsoft Chooses The A-Bomb

The final Windows Phone 7 software has been released to the phone makers. Next month you can drop by your local carrier's mall kiosk and grab a new phone and a Starbucks. Although Microsoft would love to take on the iPhone, it's more likely to try and grab some of Android's surging market share.There are some interesting perspectives in this article at Business Insider about the WP7-vs-Android choice. It starts with the money aspect: Windows Phone 7 costs a phone maker about $15 per unit in licensing to Microsoft. The article argues that the costs of customizing and adapting Android might be higher than that. Let's take a look at some of those points.

It's true that phone makers and carriers have often customized and tweaked Android. Some of that is because early Android builds lacked features. The fact that Android could be endlessly customized -- they have the source code after all -- is a trap that the phone makers fell into, and they didn't realize what a mess they could make until they deployed phones and had to update them. (Or at least wanted to update them to get new Android features.)

The latest Android 2.2 Froyo offers a pretty extensive set of features right out of the box, without any customization. Device makers can choose to use a stock distribution if they want. Yet it wouldn't surprise me if carriers still want to add or change things because it lets them customize the phone for their marketing needs. If a carrier wants to make a change, Microsoft will need to make it happen. For example, imagine if AT&T will only carry a WP7 phone if they can make Google the default search engine, because Google is paying for that privilege.

Just as importantly, carriers often want to restrict features to maximize their profits. WP7 may have to adopt a least common denominator if it wants the stock build to be used by carriers. For example, will WP7 match Android 2.2 ability to act as a Wi-Fi access point to share the wireless data connection? What if the carrier wants to disable that in favor of an extra-cost tethering plan? If many carriers disable powerful features that WP7 offers, it hurts the products reputation; if WP7 doesn't allow carriers to disable features it may not even get in the door.

Microsoft's patent protection is probably the strongest card they can play, in order to scare phone makers off Android. Any time a business can eliminate risk it's a good thing; Microsoft's cross-licensing and patent portfolio mean that they can generally defend themselves against these suits better than smaller companies. This leaves a bad taste in my mouth, though, because it's trying to convince phone makers to stop making the Android phones that consumers want. I'd prefer to see a situation where WP7 wins by customer demand.