This is a bit crazy, but an interesting idea. Over at the Seattle Weekly, Mark Fefer is arguing that a California law makes the way that Microsoft is going to handle WP7 illegal. Wait, what? Okay, here’s how it goes. In California, it is illegal “to sell any article or product at less than the cost…or to give away any article or product, for the purpose of injuring competitors or destroying competition.” This came about from a newspaper deliberately significantly undercutting an opponent, and taking a major loss, in order to damage them.
The logic is: Microsoft is spending a huge amount of money on marketing and development, and the licensing fee is so low, that they will have to sell tens of millions of units to make a profit. In other word, they’re selling products at less than cost in order to make in-roads on the market, and unseat Android and iOS from their comfortable positions. Seeing as Microsoft is inherently trying to defeat them, it’s possible that the whole situation is illegal.
I have no idea how accurate this is, or if it’s even the correct interpretation of the law, but it’s certainly an interesting thought experiment, as this type of marketing is extremely common in the tech world.