Microsoft cuts production cost of handsets with Phone 7 software

Computer software giant Microsoft will cut the manufacturing cost of its Windows Phone 7 device components by half to help bolster sales of the mobile operating system which was launch last year.

The Redmond, Washington-based company will work with parts makers, including Qualcomm, to produce its Windows Phone 7 mobile operating system for less than US$200, Windows Phone division head Andy Lees told Bloomberg Businessweek.

The lower priced Windows Phone devices will be available to market starting next year. The actual retail price will be determined by operators.

The Windows Phone 7 software was priced at US$400 when it was first released in 2010.

According to the Bloomberg report, Microsoft’s plan to cut production costs of handsets using Windows Phone 7 software by more than half is part of its overall corporate strategy to gain a larger share of the reported  $207 billion mobile-phone market.

The first models using the latest version of Windows Phone 7, called Mango, have already been shipped in Japan and the devices will be available in China next year, Lees told Bloomberg.

To read the full Bloomberg Businessweek report, click here.

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