Microsoft Hopes to Drop Windows Phone Cost by Half

Microsoft believes that by next year, the cost to produce Windows Phone smartphones will be half what it cost when the platform launched in 2010. Microsoft has cut new deals with component makers, such as Qualcomm, in order to drive down the cost to manufacture handsets. Andy Lees, head of the Windows Phone division at Microsoft, told BusinessWeek in an interview that the cost for building a Windows Phone device was $400 at launch, and it should be closer to $200 within a year. While Lees admitted that network operators set the final sales price, they should be able to offer them at lower prices. Lees said the company hopes lower cost phones leads to volume growth for the platform. Microsoft is in the middle of rolling out Windows Phone 7.5 Mango to the first generation of hardware.