TechCrunch heard Microsoft may spend half a billion dollars to promote its Windows Phone 7 platform, on top of the roughly half a billion it already spend on development costs.
Its most recent efforts in the mobile space have bombed. The company took the much-hyped Kin phone off the market after reportedly selling fewer than 10,000 units. Furthermore by spending hundreds of millions of dollars, it is effectively competing against its own business model. It licenses out its software for a fee of roughly $15 per OS shipped to manufacturers, unlike Android, which is free and lacks the same software restrictions. A big question for Microsoft is whether it will be able to keep its licensing model afloat (Even at $10 per device, 100 million Windows 7 phones will have to ship before it recoups $1 billion in marketing and engineering subsidies, not counting revenues from search advertising or its cut of app sales).
The article also mentions that only three companies are serious about launching Windows Phone 7 phones - HTC, Samsung and LG. HP backed out when it acquired Palm a couple of months ago, and Dell, Sony Ericsson, Garmin-ASUS and Toshiba don't appear to be that wild about Windows Phone 7 either.