Professional Documents
Culture Documents
Submitted By: Aniruddha Loya Akay Mustafa Aydin Castro Nicolo Das Guru Ramesh Roshan Habfast Paul Patel Pranav Suresh Ziad Hamed
Table
of
Contents
Executive
Summary
.............................................................................................................
4
Microsoft
Corporation
........................................................................................................
5
Introduction
.....................................................................................................................................
5
SWOT
Analysis
.................................................................................................................................
5
Smartphone
OS
Industry
....................................................................................................
6
Industry
Analysis
Porters
Five
Forces
Approach
............................................................................
9
Microsoft
and
Smartphones
.............................................................................................
10
Windows
Phone
8
..........................................................................................................................
11
The
3
Cs
of
Windows
Phone
8
........................................................................................................
11
SWOT
Analysis
of
Windows
Phone
8
OS
.........................................................................................
11
Objectives
...........................................................................................................................
12
Market
Share
.................................................................................................................................
12
Shipment
Volume
..........................................................................................................................
13
Microsoft-Windows
Phone
8
Marketing
Strategies
.......................................................
13
Alliance
&
Partnerships
..................................................................................................................
13
Selected
segments
.........................................................................................................................
13
Positioning
.....................................................................................................................................
14
Marketing
Mix:
The
4Ps
..................................................................................................................
14
Action
Programs
................................................................................................................
16
For
the
Manufacturers
...................................................................................................................
16
For
the
Vendors
and
Carriers
..........................................................................................................
16
For
the
Customer
...........................................................................................................................
16
Marketing
Budget
..........................................................................................................................
17
Bibliography
.........................................................................................................................
18
8 8 9 13
Table
1:
Market
share
Estimates
Table
2:
Marketing
Budget
Cost
13
17
Executive
Summary
This
report
was
commissioned
in
order
to
examine
the
current
situation
of
the
smartphone
OS
market,
and
determine
a
winning
strategy
to
apply
for
the
recent
introduction
of
the
Windows
Phone
8
operating
system
produced
by
Microsoft.
The
research
first
gives
an
overview
of
Microsofts
current
and
past
situation,
showing
how
Microsoft
currently
is
the
market
leader
in
various
markets
(47%
of
the
gaming
consoles,
94%
of
the
office
suits
and
92%
of
the
computer
OS).
Microsoft
though
has
also
given
proof
of
its
lack
of
innovativeness
in
its
products,
causing
it
to
fall
back
in
several
markets,
among
which
the
smartphone
market.
This
report
also
draws
the
attention
to
the
current
situation
on
the
smartphone
OS
market
shares,
and
its
volatility.
Symbian,
which
up
to
2007
owned
65%
of
the
market
was,
in
2011,
present
on
less
then
20%
of
the
smartphones.
The
market
is
now
divided
between
two
main
competitors,
Android,
with
about
68%
of
the
market,
and
Apple,
which
comprises
almost
17%
of
the
total
devices.
Recent
studies
have
also
shown
how
the
total
market
has
greatly
grown
even
during
the
recession,
with
an
increase
of
sales
of
61.3%
in
2011,
a
trend
that
is
not
foreseen
to
change
in
the
next
3
years.
Based
on
all
the
data
acquired
the
report
thus
tries
to
give
an
accurate
overview
on
how
Microsoft
should
approach
its
re-entrance
in
this
market,
after
the
failure
of
Windows
Mobile.
Bargaining
power
with
the
customers
is
relatively
slim
for
Microsoft,
who
has
to
sell
its
product
to
hardware
manufacturers,
especially
since
its
major
rival
(Android)
is
currently
offering
a
good
product
with
a
wide
variety
of
applications.
Furthermore
the
competitiveness
of
the
market
is
also
very
high,
something
Microsoft
is
not
used
to.
Nonetheless
the
threat
of
entry
from
emerging
companies
is
relatively
small,
as
the
development
of
a
new
OS
requires
large
capital
and
know-how,
as
well
as
the
threat
of
substitution,
which
could
possibly
only
be
done
by
netbooks,
which
nonetheless
remain
in
a
different
market.
Keeping
in
mind
all
of
the
characteristics
of
the
market
Windows
Phone
8
presents
several
opportunities,
in
particular
for
business-oriented
customers.
Microsoft
Corporation
Introduction
Microsoft
Corporation,
founded
in
1975
by
Bill
Gates
and
Paul
Allen
is
the
largest
software
developing
company
(in
terms
of
revenues)
with
its
headquarters
in
Redmond,
Washington
USA.
It
develops,
manufactures,
licenses
and
supports
a
wide
range
of
products
and
services
related
to
computing.
Microsoft
operates
businesses
in
five
segments (Microsoft Corporation):
Windows
&
Windows
Live
Division:
Microsoft
is
market
leader
in
this
segment.
Its
principal
products
and
services
are
Windows
operating
system,
Windows
Live
suite
of
applications,
web
services
and
Microsoft
PC
hardware
products.
Server
and
Tools:
Microsofts
principal
products
and
services
in
this
segment
are
Windows
Server
operating
systems,
Windows
Azure,
Microsoft
SQL
Server,
SQL
Azure,
Windows
Intune,
Windows
Embedded,
Visual
Studio,
Silverlight,
System
Center
products,
Microsoft
Consulting
Services
and
Premier
product
support
services.
Online
Services
Division:
Microsofts
principal
products
and
services
in
this
segment
are
Bing,
Microsoft
adCenter,
MSN
and
Atlas
online
tools
for
advertisers.
Microsoft
Business
Division:
Microsoft
has
a
dominant
market
in
office
suite
markets
with
Microsoft
Office.
Its
other
principal
products
and
services
in
this
segment
are
Microsoft
Exchange,
Microsoft
SharePoint,
Microsoft
Lync,
Microsoft
Dynamics
ERP
and
Dynamics
CRM,
Microsoft
Office
Web
Apps
such
as
Office
365.
Entertainment
and
Devices
Division:
Microsoft
principal
products
and
services
in
this
segments
are
Xbox
360
gaming
and
entertainment
console,
Kinect
for
Xbox
360,
Xbox
360
video
games,
Xbox
360
accessories,
Xbox
LIVE,
Mediaroom
and
Windows
Phone.
It
also
entered
the
vendor
market
by
launch
of
Microsoft
Surface
tablet
computer.
For
the
fiscal
year
2012,
Microsoft
had
earned
revenue
of
US$
73.7
billion,
employed
approximately
94,000
people
on
a
full-time
basis,
55,000
in
the
U.S.
and
39,000
internationally.
It
is
one
of
the
most
valuable
companies
in
the
world (Microsoft Corporation).
SWOT
Analysis
Internal
1. Strength
Microsoft
is
the
market
leader
in
Xbox
360,
video
game
console,
with
47%
of
the
market
share;
MS
Office,
office
suite
for
desktop
applications,
has
94%
of
the
market
share;
and
Windows
OS
is
the
largest
operating
system
in
the
world
with
92%
of
the
market
share
in
the
Operating
software
industry.
Microsofts
Internet
Explorer
is
the
second
largest
web-browser
and
Bing
is
the
second
largest
search
engine.
Microsoft
has
extensive
dealer
network
and
contracts
with
all
the
major
OEMs.
Microsoft
also
has
strong
financials.
Apart
from
product
specific
R&D
teams,
it
also
has
a
strong
independent
research
wing (Microsoft Research), which often provides the development division with key technology upgrades and ideas. 2. Weakness Microsofts company culture lacks innovativeness as it faces a severe constraint in technology innovations having to support the legacy products over an extended period of time and also maintaining the backward compatibility in its new products. It also has a historical baggage of producing software with bugs. It has very limited experience in hardware industry (PC, smartphones and tablets) with its only exposure through X-box, video game consoles. External 3. Opportunity Microsoft has opportunity through the next generation products such as Windows 8, Windows Phone 8, Surface tablets and Xbox 720. Their also exists an opportunity to enter the hardware markets for tablets & smartphones, like it has entered the video game console market. 4. Threat Microsoft is perceived primarily as a PC brand; its primary revenues come from the OS sold to the desktops, while current trend of market is moving towards mobile devices smartphones and tablets. Technology life cycle of the industry is getting shortened and traditionally Microsoft hasnt been the quickest to respond. In operative system space, the open source models like various Linux flavors and Mac-OS (another Unix derivative) used by Apple have proven to be innovative and have quick response cycles to new trends. Similarly, in the graphical web browser market Internet Explorer lost its dominant position, offers lesser features and is last to adapt to new web technologies like HTML5 in comparison to Chrome, Safari and Firefox. Moreover, their products are susceptible to widespread piracy and virus attacks.
Smartphone
OS
Industry
Smartphone
devices
comprises
of
hardware
and
software.
In
both
domains
there
are
different
players
in
the
market.
In
context
of
this
report,
we
are
going
to
focus
at
the
smartphone
operating
system
(OS)
industry,
the
key
segment
of
the
smartphone
software
industry.
Smartphones
OS
comes
in
3
different
forms:
(1)
Proprietary:
These
are
developed
in-house
by
the
smartphone
manufacturer
like
Apple
(iOS),
RIM
(BlackBerry
OS),
Palm
(webOS,
acquired
by
HP).
In
this
approach
the
manufacturer
can
attain
advantage
by
differentiating
it
smartphone.
By
this
approach
manufacturer
vertically
integrates
the
supply
and
value
chain.
(2)
Licensable:
These
are
essentially
proprietary
OS
but
the
owner
themselves
do
not
manufacture
the
phones
and
license
their
OS
to
various
OEMs.
Windows
Mobile
and
now
Windows
Phone
series
come
under
this
category.
This
model
helps
OEMs
by
reducing
the
cost
of
developing
OS
by
taking
advantage
of
already
existing
platform.
We
saw
Nokia
loosing
its
market
leader
position
after
failing
to
develop
an
OS
to
compete
against
iOS
and
Android.
Similarly,
Samsung
started
working
on
Bada,
which
hasnt
been
very
successful
forcing
Samsung
to
adopt
Android
and
Windows
Phone
as
the
preferred
platform
for
its
smartphones.
(3)
Open
Source:
These
are
freely
available
OS,
regularly
customized
by
the
OEMs
to
suit
their
taste
and
style.
Andorid,
Symbian
OS,
MeeGo
are
some
of
the open source OS. Many of them are backed by big companies, for instance Android by Google and Symbian by Nokia & Accenture, and being available at no cost to OEMs, they evolve to dominate the market share in terms of units sold. (Cromar, 2010) Smartphone Industry is a rapidly changing and highly competitive industry. IBM developed the first smartphone in 1992, than in 1996 Nokia came with Nokia 900 smartphone series. In particular, it was the release of Apples iPhone, in January 2007 that marked the true beginning of the smartphone era while its predecessors were categorized by many experts as feature phones. With the advancement of technology and new players entering the market, the competition became very stiff ultimately leading to OS-wars. This brought into direct competition five key brands: Apple, which promotes its intuitive and user friendly iOS, Google, with its open-source and ever expandable Android, Nokia, which was the leader in this business with Symbian OS, RIM, with its enterprise friendly BlackBerry OS, and Microsoft, which had to restart from scratch after its original OS (Windows Mobile) failed to live up to expectations (Arthur, 2012). Smartphone market has seen a steady growth since 2007 (Figure 1: Sales of Smartphones). With the growth of the smartphone business, the business behind the operating systems and supporting applications has also grown. Especially considering how present smartphones companies tend to link their phones to a particular OS, making it impossible for the average user to switch between different software. This has created a particular bond between hardware and software producers, which has lead to a symbiotic relationship between companies. Thus, the success of both the brands depends on the others work. Furthermore this market is also characterized, as all high tech markets are, by a fast paced change in user opinions, and a very short life cycle for the products, forcing the companies to be quick and agile. As illustrated in Figure 2: Market Share OS wise for last 5 years, Symbian, leader with over 65% of the market share in 2007, dropped to below 20% of the market share in 2011 having failed to meet costumers changing needs and expectations. In recent years the smartphone market has became price sensitive, which explains the growth rate experienced by Android in the last couple of years, as it is shipped by Samsung and HTC, the two companies that tend to offer devices in a wider price range. Right now the main protagonist of the mobile operating systems is Android, who according to IDC, is present on 68.1% of the 169.4 million smartphones sold worldwide in Q3 2012, followed by Apples OS at 16.9% Figure 3: Q32012 Market Share for OS (Brownlow, 2012). According to IDC, smartphone market in 2011 showed a 61.3% year-on-year growth reaching 494.4 million shipments. They estimate total shipment to reach 717.5 million implying a 45.1% year on year growth. Estimating a CAGR of 18.3% for 2012-2016, smartphone market is expected to reach 1.4 billion units by 2016.
1600 Sales of Smartphones (millions of units) 1400 1200 1000 800 600 400 200 0 2007 2008 2009 2010 2011 2012E 2013E 2014E 2015E 2016E
70%
60%
Percentage
Market
Share
50%
40%
30%
20%
10%
0%
2007
2008
2009
Year
Figure
2:
Market
Share
OS
wise
for
last
5
years
(Source:
Christy,
Gartnet
Newsroom,
2012)
Android Blackberry iPhone Linux Palm/Web OS (Palm/HP) Symbian Windows Mobile/ Phone Bada (Samsung) Other 2010 2011
4% 5%
4% 2% Android iOS
17% 68%
requirement of decent bandwidth in case of netbooks. Thus, we perceive them as moderate threat (Chao, Fan, Lin, & Saha). Threat of Entry: Low Mobile OS have higher constraints in terms of memory and power consumption but at the same time need to provide rich features and must support and integrate well with the manufacturers hardware specifications. Thus, in order to develop a new Mobile OS platform, a firm requires a great amount of knowledge and experience is relevant technologies along with a substantial amount of capital to support its R&D activities. Secondly, there is a high cost of switching for the hardware manufacturer. As a hardware manufacturer, the collaboration with the OS maker is maintained from the starting point to insure the compatibility and competency of the OS with their phone taking into account the targeted battery life and cost and the platform for holding the required features and applications. So this makes it difficult for the manufacturer to change the OS and difficult for a new OS developing firm to find a customer (Chao, Fan, Lin, & Saha). Intensity of Existing Rivalry: High The smartphone industry is still growing rapidly. Two major players Android and iOS accounts for 75% of the market share. Other competitors have carved their niche and also have strong capital background and firms easily adapt to change in the market and accordingly increase the competition in the targeted segment. For e.g. BlackBerry started with targeting the enterprise segment before moving to consumer market.
10
smartphones in the users pocket through its operating systems designed for mobile devices. Windows Phone 8 is Microsofts latest push in this area.
Windows
Phone
8
Windows
Phone
8
(WP8)
is
the
second
generation
of
the
Windows
Phone
mobile
operating
system
that
was
released
to
consumers
on
October
29,
2012.
Three
companies
initially
launched
the
devices
with
integrated
WP8:
Nokia,
Samsung,
and
HTC.
It
is
the
first
mobile
OS
from
Microsoft
to
use
the
Windows
NT
kernel,
which
is
the
same
kernel
that
runs
Windows
8,
their
latest
operating
system
for
the
personal
computers.
WP8
offers
a
truly
personal
phone
experience,
connecting
users
to
the
people
and
things
that
matter
most.
WP8
is
new
from
the
ground
up
which
means
that
the
operating
system
is
incompatible
with
all
existing
hardware
and
so
the
previous
Windows
Phone
7.x
devices
cannot
run
or
upgrade
to
WP8
and
the
new
applications
compiled
specifically
for
WP8
will
not
be
compatible
with
Windows
Phone
7.x
devices.
2. Weaknesses WP8 OS is incompatible with previous hardware thereby no option for upgrading. Previously Microsoft has promised update to version 7.8 for the early adopters of version 7.5, but hasnt been done in over 5 months since announcement, leading to a large disappointment amongst the early adopters. WP8 OS offers weak applications eco-system. It only offers 120,000 applications compared to 700,000 plus applications provided by Apple iOS and Google Android. WP8 dont have maps, only Nokia (maps) phones have turn-by-turn driving directions. It is difficult to offer low-feature models like Android to reduce product price for mass market. External 3. Opportunities There exist an opportunity to establish a strong partnership with Nokia, who lost their market leader position, and are struggling in the space due to lack of quality operating system for their smartphones. Microsoft also has great opportunity in enterprise market that has fragmented with Blackberry no longer the preferred phone for the users. With most companies using Windows server software for their internal & external use, WP8s seamless integration features can turn this into a great opportunity. Mobile carriers are adopting anti-Apple, anti-Android rhetoric, want a third ecosystem other than these two dominant mobile OS systems. (Global Equity Research, 2012) 4. Threats WP 8 OS has threat of the lawsuit filed for tiles patent. The competitors (Blackberry, Apple, Google) in the market are coming out with major breakthrough changes could draw curtains to their plans. Nokias move to Android could be a major setback.
Objectives
Market
Share
Windows
Phone
OS
hasnt
actually
taken
the
market
by
storm
until
now,
and
has
in
fact
sold
under
Microsofts
expectations,
but
then
there
had
been
a
considerable
skepticism
going
on
in
the
market
with
the
existing
Windows
Phone
7.5
getting
obsolete
with
launch
of
Windows
Phone
8
and
no
updates
being
provided
for
it,
which
affected
the
sales
considerably.
Despite
that
Microsoft
managed
to
increase
its
share
in
smartphone
market
by
more
than
1%
in
the
last
one
year
and
is
expected
to
reach
2.6%
by
the
year-end.
With
Windows
Phone
8
in
the
market
and
positive
expected
growth
for
smartphones,
we
foresee
a
growth
in
its
share
in
the
mobile
OS
market
in
the
coming
quarters.
We
are
aware
of
the
fact
that,
WP8
being
a
new
entrant
in
a
highly
competitive
market,
will
need
time
to
rise
up
in
the
ladder.
According
to
an
independent
study
by
Canalys
(Feb
2012)
Windows
phone
&
Windows
mobile
together
accounted
for
only
1.4%
market
share
in
2011
that,
according
to
IDC,
has
significantly
increased
to
3.5%
in
Q3
2012
and
expected
to
reach
2.6%
for
the
year
2012.
IDC
estimates
(Table
1)
a
market
share
of
11.4%
by
2016
for
the
Windows
phones.
In
view
of
this,
we
aim
to
achieve
a
market
share
of
4.6%
for
the
year
2013
with
future
targets
as
illustrated
in
Figure
4.
12
Shipment
Volume
Our
target
of
4.6%
market
share
for
2013
implies
a
shipment
volume
of
45
million
smartphones
operating
on
WP8
operating
system.
Given
the
slow
cycle
of
update,
we
do
not
expect
a
brand
new
OS
(WP9)
in
2013
but
only
incremental
updates
to
WP8,
so
majority
of
Windows
phone
sold
would
be
running
the
latest
WP8.
We
aim
to
achieve
these
objectives
using
the
strategies
discussed
in
the
following
section.
Smartphone
OS
Android
iOS
BlackBerry
OS
Windows
Phone
Linux
Others
Total
2012E
68.30%
18.80%
4.70%
2.60%
2.00%
3.60%
100.00%
2016E
63.80%
19.10%
4.10%
11.40%
1.50%
0.10%
100.00%
100.0
50.0
-
200.0
150.0
12%
10%
8%
6%
4%
2%
0% 2012E 2013E 2014E 2015E 2016E Units Shipped (in millions) % Market Share
* It is important to note here that mobile phones having become a commodity product, market penetration is not a good measure as it is difficult to account for discarded phones.
Selected
segments
To
succeed
WP8
enabled
phones
will
have
to
target
the
entire
consumer
market
but
we
emphasize
on
a
focused
approach
to
enter
and
dominate
the
enterprise
segment,
which
after
the
decline
of
Blackberry
is
very
fragmented.
13
Positioning
For
Mobile
Network
Carriers:
A
smartphone
that
unlike
others
is
smart
to
reduce
your
mobile
data
traffic
and
at
the
same
time
provides
your
customers
a
truly
smart
experience.
For
Normal
end-user:
Who
want
a
truly
personal
smartphone,
WP8
enabled
phones
offer
The
perfect
companion
for
your
Windows
devices
and
your
Xbox
along
with
Skydrive
cloud
storage,
a
range
of
brands,
form-factor
and
color
to
choose
from
and
unlike
others,
a
phone
customized
and
personalized
to
your
tastes
right
from
the
start
screen
to
display
size
of
each
item
to
the
updates
received.
For
Corporates
&
Enterprise
Customers:
who
wants
a
seamless
integration
across
their
enterprise
network
and
workstations
and
security
features
like
never
before.
WP8
offers
all
these
along
with
child
corner
to
avoid
accidental
emails
sent
to
your
key
clients
as
your
kid
plays
his
favorite
games.
14
Promotion: The promotion factor has been grand but the advertisements by Microsoft have not been very clear and focused on end-users rather they are very encrypted and tech oriented, which might not work with the target consumers. Microsoft tried creating a buzz around the product launch by releasing a developers preview few months before the actual launch, but there was a lack of proper effort in maintaining and propagating it with suitable follow-up activities. Negative sentiments of early adopters of Windows Phone 7.5 didn't helped to Microsofts cause. We believe workshops and app contests before launch could have helped sustaining the buzz and also filled up their app store with more apps. Presently, they are promoting WP8 phones as a better alternative to iPhones/Android phones by comparing and actually showing the better features in tech blogs and YouTube. This is helping to promote the Windows Phone, but is not getting viral since the complimentary TV commercials, to generate users curiosity to search more, are lacking. We believe Microsoft needs to effectively use television commercials to show users how Windows Phone is better, and target the competitors brutally in the competing environments dominated by Apple and Samsung killer ads. Also promotion strategy in this segment is all about the ecosystem experience, and though the Windows Phone 8 lacks the number of applications it still has all the best possible used applications from the Android market and the App store, and they need to make it visible in their adds not just mention about it, since users feel demotivated when they compare the 120,000 applications in Windows Phone to the over 700,000 applications in Apples AppStore and Android market, even though they use merely 10-20 applications from it. A simple commercial showcasing the users enjoying those 20 applications on WP8 would be more effective. Microsoft should also use its various channels to do the promotion of its mobile operating system, like the Office Suite and Bing its search engine, which are used by many users daily. Promotion should reach out to the end user and should be viral through all possible media to generate enough buzz and hype for Windows Phones, especially in this quarter since it is holiday season and the advertisements could be showing WP8 phones as the best Christmas/New Year gift ever. Also for promotion a good partnership with manufacturers in the advertisement promoting WP8 should be a good way to advertise the product Place: The customer for our operating system is the OEMs and their customers i.e. the end-users buying the smartphones. Microsoft as of now has tie up with Samsung, Nokia, HTC and Huawei for manufacturing the WP8 smartphones, and these phones are available to the end users from phone carriers or the retailers. Microsoft can directly reach to the enterprises that are already using the Windows network in their work place and make contracts with them for providing their office executives with WP8, the kind of strategy RIM adopted for BlackBerry devices.
15
Action
Programs
Nokias
abandoning
of
Symbian
platform
and
addressing
network
carriers
woes
of
high
data
traffic
by
the
new
Data
Sense
capabilities
provides
WP8
a
strong
base
to
capitalize
on.
Also
it
can
leverage
its
tie- ups
with
corporates
having
existing
Windows
framework
to
considerably
dent
the
Blackberrys
OS
market.
Since
we
have
a
price
premium
with
our
product,
we
cannot
directly
compete
with
Android,
and
again
we
already
have
an
indirect
advantage
from
Android
sales
through
licensing
patent
progress,
so
for
now,
we
need
to
focus
mostly
on
taking
shares
of
iOS
and
other
mobile
operating
systems.
From
our
own
experience
and
observing
the
competitors
we
have
learnt
that
before
a
phone
is
sold
it
has
to
go
through
a
number
of
obstacles.
It
needs
to
appeal
to
operator/distributor
priorities,
it
needs
to
fill
a
slot
in
a
portfolio
of
products
for
the
manufacturer
and
the
channel,
it
needs
to
acquire
shelf
space,
it
needs
to
appeal
to
end
users
and,
unless
it
has
a
blindingly
strong
brand,
it
needs
to
offer
incentives
to
the
retailer.
We
recommend
the
following
action
for
the
key
stakeholders
in
this
ecosystem
to
drive
WP8
to
be
the
third
force
in
mobile
OS
market
in
coming
quarters.
16
also be used as TV commercials to reach wider audience, as majority of the phone buyers arent tech bloggers. The more clearly we show our strength in the TV adds over the iPhones/Android, the easier it will be to reach the masses. Special discounts on Xbox stores, more space on Skydrive, free Skype upgrades to premium accounts for a year, etc. are some bundled features which could incentivize the sales of WP8. For the enterprise customers, seamless integration with their existing Windows office network and the enhanced security with Bitlocker encryption are the key features we need to promote. Added incentives to corporates in terms of reduced prices for Windows 8 upgrade or upgrades to other softwares bundled together with WP8. These would be a great attracting force for them to switch to WP8 phones from their existing Blackberry systems. We should also offer them benefit of free support and thus an easier way to upgrade, which will be useful for us in the long run.
Marketing
Budget
With
the
aim
to
sell
45
million
Windows
Phone
systems
in
2013,
we
propose
the
breakdown
of
the
cost
of
marketing
on
each
phone
as
per
the
table
below.
From
the
below
table,
we
can
see
that,
around
20- 30$
will
be
spent
on
marketing
for
each
phone
sold
with
Windows
Phone
8
operating
system.
But
to
reach
the
figure
of
45
million
buyers,
we
need
the
advertisement
and
promotion
to
reach
much
wider
canvas
of
users,
and
correspondingly
there
would
be
an
increase
in
the
final
marketing
budget.
Elemental
Cost
of
Marketing
Cost/Phone
($)
Phone
Manufacturers
Co-Op
Add
5
Vendor/Retailer
Initiatives
5-10
Support/Service
5
Advertisement
5-10
Table
2:
Marketing
Budget
Cost
The final marketing budget would be triple the calculated figure of USD 900 - 1350 million for the running promotions, and including the launch buzz and initial pre-launch promotions, the marketing budget would rise to around USD 2.7 - 4 billion for Windows Phone 8.
17
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