A recent report by Bloomberg states that Microsoft is working with Qualcomm to produce smartphone chipsets in order to drive prices down for Windows Phone devices, so that it can capture a bigger share of the smartphone market.
Currently the cost of producing a Windows Phone device is close to $400, but Microsoft is working with component suppliers to bring it down to $200, so that manufacturers can bring Windows Phone device prices down.
Andy Lees, head of the Windows Phone division said:
“Microsoft works exclusively with Qualcomm to develop chips that power handsets using its system, allowing it to specify technical details to ensure devices run more smoothly. There is currently no plan to work with other semiconductor makers for Windows Phone 7 devices.”
WinTel (Windows + Intel) –> WinComm (Windows + Qualcomm) ?
The first thing that came to my mind when I read this statement, was the WinTel alliance of the last decade. Microsoft and Intel completely dominated the market using monopolistic actions that led to antitrust lawsuits against both of them. Both had near 90% market share in their respective markets at their peak, with negligible competition.
However, the WinTel domination broke off in the early 2000s due to various factors. More recently, Microsoft announced that it would make Windows 8 compatible with both X86 and ARM processors, which further soured the relationship between Microsoft and Intel.
If Windows Phone does take off, we could see it happen again in the form of WinComm (Windows + Qualcomm).
However, it seems unlikely, given the growing popularity of Android and iOS which are already dominating the smartphone landscape, and are unlikely to cede ground any time soon.