The patent licensing fees are confidential but I think they’re likely to be less than $5 a handset based on blogs such as floss patents. Plus as patents expire, you could expect that to drop over time. I don’t think Google charges for apps, but you need to an official member of the Open Handset Alliance to get them (they are not covered by Android’s open source licence).
It’s funny to suggest that Microsoft would win customers for $0. After all, this awesome price didn’t help Linux on the desktop very much — modern desktop Linux is great and free, and runs on great hardware. It’s the platform problem. No one will use the platform because no uses it. If Windows Phone was free, right now only one of those three points would be true, and even then it still leaves the platform problem. I suppose lockin is less of a problem because apps are cheap and many are web-based. Maybe there is a glimmer of hope. With years of great hardware and software execution, perhaps Microsoft could get a third of the market. But what I struggle to understand is the prize Microsoft is pursuing. Despite 95% desktop share they’ve not dented Google in search, and they don’t make hardware or retail margins. And actually, as far as enterprise is concerned, their big problem is fruit related.
