Jonathan Goldberg, an analyst at Deutsche Bank, told Tech Crunch that Microsoft will spend at least $400 million on marketing the Windows Phone 7 launch, which should come before the end of the year.
The rest of the cash will be spent trying to subsidise handset manufacturers’ “non-recurring engineering” costs.
Goldberg said that Windows Phone 7 was “make-or-break” for Microsoft and it needed to spend the cash to stay in the mobile game.
Microsoft executives told Goldberg during a recent visit to company headquarters that the company, carriers, and manufacturing partners, would spend “billions” of dollars in the first year on marketing and development of Windows Phone 7.
Another source estimated a $1 billion price tag for the launch, with half of it going to marketing.
Last year Microsoft spent $1.4 billion on advertising but it had to shell out for a whole range of products.
According to the report, Microsoft, in order to attract third-party developers to its platform, is offering revenue guarantees and other financial support.
IDC thinks that it will all pay off and there will be 30 million Windows Phone 7 devices by the end of 2011.
While you would expect Microsoft to shell out lots of dosh pushing any product, the figure is high by anyone’s standards. It is more than double Apple’s entire marketing budget. What is particularly annoying for Microsoft is that it is money that probably would not have had to be spent if the outfit had not dropped the ball on the mobile market and handed the entire market to Apple and Google.