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  • Microsoft's master stroke: Pay store staff per WinPhone sold

    Open... and Shut Microsoft, which has suffered years of irrelevance in mobile, has a new game plan, which looks suspiciously like its old game plan: pay retail employees to sell Windows.

    Microsoft isn't alone in trying to find incentives with partners to unseat Apple, but the bluntness of its approach will irk many as classic Microsoft. With a reported budget of $200M to spend in the US alone, and Nokia doubling Microsoft's spend with AT&T, this may be Microsoft's best chance yet to finally convince mobile users to give Windows a try.

    Back when people were wedded to their computers, Microsoft paid partners to ensure they were faithful to Windows. This strategy was especially useful during the dark days of Vista, when Microsoft pulled out all the stops to incentivise OEMs and others to ship the ill-fated operating system. Other incentive programmes continued through Windows 7, and extended to other products like Microsoft Dynamics, and will likely continue forever.

    At Microsoft, financial incentives to use and distribute its software are eternal.
    It's therefore not surprising that Microsoft would spend money convincing partners to distribute and market Windows Phone 7. What is surprising is that it's not spending even more. And that it took so long.

    Back in June 2011, Microsoft's Windows Phone product manager, Greg Sullivan, insistedthat the Redmond giant wouldn't be offering financial incentives to retail sales staff to promote Windows Phone 7 devices. Just five months later, Microsoft was advertising Windows Phone Channel Marketing positions that describe "RSP [Retail Salesperson] Sales Incentives".

    How much in incentives? According to Paul Thurrott, Microsoft will pay retail employees $10 to $15 per Windows handset sold.
    That's a lot of money, and may move the needle in Microsoft's favour.
    Not that Microsoft is completely alone in this strategy. Google, after all, bought much of Android's early success by sharing search revenues with partners who agreed to ship Android devices. Open-source Android wasn't free: it was better than free to carriers and device manufacturers who otherwise had to pay Microsoft or Apple hefty fees for each device.

    Not just up-front fees per device, either, but in the case of AT&T, it's reportedly paying Apple $18 per subscriber per month. AT&T, in turn, allegedly tries to make up such fees by overcharging its subscribers by as much as 300 per cent for data usage, according to a new lawsuit.
    Compared to Apple, free money from Microsoft and Google must look pretty good to the carriers.
    That is, if they can sell Windows phones. They've already demonstrated an ability to sell Android devices a'plenty. Microsoft seems to think a little grease with retail salespeople can make Windows pay in mobile, just as it did on the desktop.

    Not content to subsidise the lifestyles of retail employees, however, Microsoft is also continuing its slash-and-burn patent strategy against Android. Microsoft has been seeking as much as $15 per Android device sold from Samsung and others, totaling as much as $444m for Microsoft, according to a Goldman Sachs report.
    Google calls this "extortion," and it may be right. But $444m goes a long way toward subsidising Microsoft's Windows Phone 7 marketing incentives, and may be just enough to give Microsoft a fighting chance in mobile. It's not pretty, and is a poignant reminder of how ugly Microsoft will sometimes fight to win. But it may succeed, all the same.
    Comments 8 Comments
    1. megabyteme's Avatar
      megabyteme -
      This is not enticing me to give any kind of care about M$. Honestly, I kinda hate those kiosk people, anyway...
    1. LancelotSA's Avatar
      LancelotSA -
      Quote Originally Posted by megabyteme View Post
      This is not enticing me to give any kind of care about M$. Honestly, I kinda hate those kiosk people, anyway...
      I too hate them, and prefer to make my decision online before even approaching a retail shop, much to the disgust of most sales people. BUT you seem to be missing the point in the article that it is not only Microsoft involved in these "dodgy" acts. I am reluctant to call it dodgy, in fact, as it seems to have become the modern way with big business...
    1. bobbintb's Avatar
      bobbintb -
      eh. it wont work anyway. its funny how oblivious and naive microsoft is to their status. they arent as big as they used to be. they always come late to the party with a third rate product and expect to be top dog in the market and it never happens.
    1. Glaucon's Avatar
      Glaucon -
      The only way they can convince me to use those phones is if they give me one for free.
    1. Jiminamsterdam's Avatar
      Jiminamsterdam -
      O Please ! Microsoft is no different than any other company, "it's a business" and businesses are in the business of making money "profit" I'm soooo bored hearing all these sicophantic (arse kissing) statements about MS or Apple, but "they allways come late to the party" what a lot of nonsence ! MS where selling data phones long before Mr Jobs improved on the idea and made them poplular, (iphone) certainly I will agree that their effort before W/phone/7 was truly dreadful and their market share reflected this. However why anyone would call W/phone/7 a third rate product is beyond me when it clearly works every bit as well as iphone or Android devices, I own an Android phone at the moment I have owned an iphone too and when I choose my next phone it wont be based on kissing any CEO's arse, but on the merits of the device whoever happens to make it !
    1. Glaucon's Avatar
      Glaucon -
      Quote Originally Posted by Jiminamsterdam View Post
      O Please ! Microsoft is no different than any other company, "it's a business" and businesses are in the business of making money "profit" I'm soooo bored hearing all these sicophantic (arse kissing) statements about MS or Apple, but "they allways come late to the party" what a lot of nonsence ! MS where selling data phones long before Mr Jobs improved on the idea and made them poplular, (iphone) certainly I will agree that their effort before W/phone/7 was truly dreadful and their market share reflected this. However why anyone would call W/phone/7 a third rate product is beyond me when it clearly works every bit as well as iphone or Android devices, I own an Android phone at the moment I have owned an iphone too and when I choose my next phone it wont be based on kissing any CEO's arse, but on the merits of the device whoever happens to make it !
      You're jumping to conclusions. By refusing the product, I do not "kiss any CEO's arse", I'm merely happy with the product I currently own and as such feel no temptation to switch to the Microsoft product which apparently struggles to attract customers anyway.
    1. bobbintb's Avatar
      bobbintb -
      Quote Originally Posted by Jiminamsterdam View Post
      O Please ! Microsoft is no different than any other company, "it's a business" and businesses are in the business of making money "profit" I'm soooo bored hearing all these sicophantic (arse kissing) statements about MS or Apple, but "they allways come late to the party" what a lot of nonsence ! MS where selling data phones long before Mr Jobs improved on the idea and made them poplular, (iphone) certainly I will agree that their effort before W/phone/7 was truly dreadful and their market share reflected this. However why anyone would call W/phone/7 a third rate product is beyond me when it clearly works every bit as well as iphone or Android devices, I own an Android phone at the moment I have owned an iphone too and when I choose my next phone it wont be based on kissing any CEO's arse, but on the merits of the device whoever happens to make it !

      first off, i meant "they always come late to the party" as a generalization on a number of their business practices. there have been numerous occasions where microsoft half-assedly (its a word) enters a market well after there are already well established players, even to the point where they are synonymous to a certain company, for example, skydrive. or they will just revamp or remarket an older product without really improving it much. no shit they are just any other company. my point is they are still trying to compete with 1995. they are, at many times, seemingly oblivious to the fact that they are not the company they used to be.

      secondly, i called windows phone 7 a "third rate product" because THEY ARE LITERALLY RATED THIRD! that, and you clearly havent tried to use one. i dont know how that is beyond you, but i guess if you havent been paying attention to the smartphone market for the last year, which apparently you havent, maybe it is understandable after all.
    1. megabyteme's Avatar
      megabyteme -
      Quote Originally Posted by LancelotSA View Post
      Quote Originally Posted by megabyteme View Post
      This is not enticing me to give any kind of care about M$. Honestly, I kinda hate those kiosk people, anyway...
      I too hate them, and prefer to make my decision online before even approaching a retail shop, much to the disgust of most sales people. BUT you seem to be missing the point in the article that it is not only Microsoft involved in these "dodgy" acts. I am reluctant to call it dodgy, in fact, as it seems to have become the modern way with big business...
      Actually, I was referring to the fact that if M$ wants to entice customers (and that is really what they need to do), they need to build better, more desirable products. Paying some min-wage, pimply kid an extra fiver to sucker an occasional, unsavy customer is NOT the way to build market share. They are doing the same thing with their "Bing-le Berry" search service. They've lost BILLIONS trying to force crappy products/services on the public. It don't work. Not anymore, anyway.