Photo: Ellis Hamburger, Business Insider
Microsoft has spent $400 million launching Windows Phone,* including the beautiful Nokia Lumia 900 version, according to the Guardian. That’s on top of the $150 million AT&T reportedly budgeted for the same thing.The problem is, no one wants the phone. With $550 million in marketing dollars now mostly gone, Nokia has only sold 330,000 of the devices in the U.S. this year, according to one analyst. (They also cut the price.)
That works out to about $1,666 in ads and promotions for every phone sold. (Each phone cost $100 before the price cut to $50.)
That’s not a completely fair set of numbers—the Microsoft budget was spread over the last two years and it’s not clear how much of AT&T’s budget comes from Microsoft’s co-op dollars.
But the point is that even if you take the most conservative estimate possible ($400 million for 8.5 million total devices sold) then Microsoft is still spending $47 on ads for each $50-$100 device it sells.
And that’s before you even get to the manufacturing and overhead costs.
*See comments below.
- AT&T Could Spend $150 Million On Ads For A Phone With Only 3.9% Market Share
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