Microsoft Offers Windows Phone 'For Free' To Lower Manufacturer's Costs and Increase Market Share

Apr 2 2014, 7:32pm CDT | by

Microsoft Offers Windows Phone 'For Free' To Lower Manufacturer's Costs and Increase Market Share
Photo Credit: Forbes Apple

Windows Phone is free.

Let’s start with that phrase, because it’s about to get sliced and diced, it’s about to have a bundle of caveats,and  it’s not going to mean the bill of materials lie that says software will actually read $0.00. But that statement, coming out of Microsoft’s Build 2014 conference, is not only a clear in its intention, but it is also being repeated loudly around the tech reporting circles.

Of course the details count. While the licence will be free, that’s not the only software cost involved in a smartphone. There are patent fees to consider, there are the deals put in place with third party apps and services to have them bundled in the firmware, and there are countless ‘testing and certification’ systems that could easily add to the cost of a Windows Phone licence (and note this deal is any Windows Device with a screen under nine inches, so while Windows Phone is the big winner, smaller Windows 8 powered tablets will also benefitting).

Manufacturers will be looking at the small print in the contract, but the message is clear. Microsoft is moving towards a cloud-first approach, and their chief concern is to get people into the ecosystem and start using the cloud. That could be through MS Office for iPad, it could be through a new smartphone, or it could be through a cheap Windows 8 tablet.

Will this skew the marketplace for smartphones? Up until now, the choices were either a full licensing deal and the associated costs with Microsoft, or use the open choice of Android and deal with Google Play and the Open Handset Alliance. That choice has shifted now, and I suspect Microsoft will reap the benefit of this over the next year, and beyond.

Some will say it is too little, and too late, to compete with the rush of Android. That remains to be seen. While some territories are now at saturation levels with smartphones, and the easy profit and market-share of North America and Europe already divvyed up, there are huge tract of land and legions of users who have still to get their first smartphone.

That’s where Microsoft’s focus with Windows Phone should lie. Territories where a a $700 flagship handset is simply far too expensive , and the battle is all about the budget smartphones on sale in the $100-$200 range. That means a focus on lowering the bill of materials, and removing the cost of the operating system licence is going to have a significant impact on manufacturers.

As for Microsoft, they should finish up the purchase of Nokia’s Devices and Services division in the near future, and at that point the will be selling the vast majority of Windows Phone devices (over 92% at the end of 2013, reports AdDuplex). The licence would be part of the internal market, but not affect the bottom line coming out of Redmond.

By removing the licence fee, Microsoft level the playing field for manufacturers, they trade a relatively small short-term profit for a more attractive long-term position, and they create some good news and momentum around the Windows Phone platform.

I’m loving this move.

Microsoft's Biggest Hits And Flops

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

TSMC’s 20-Nanometer A8 Chip Applied in the iPhone 6 and iPhone 6 Plus
TSMC’s 20-Nanometer A8 Chip Applied in the iPhone 6 and iPhone 6 Plus
Apple disengages Samsung from producing the new A8 processor
 
 
Apple Launches the iPhone 6 and iPhone 6 Plus in US and Canada
Apple Launches the iPhone 6 and iPhone 6 Plus in US and Canada
The customers formed huge queues to collect the new smartphones
 
 
Tim Cook Surprises the iPhone 6 Purchasers at Apple’s Palo Alto Store
Tim Cook Surprises the iPhone 6 Purchasers at Apple’s Palo Alto Store
Tim Cook not only took selfies but also made fun with the Apple customers
 
 
Childless couples too enjoy family meals
New York, Sep 19 (IANS) Couples without kids in the house are just as likely as adults living with young children or adolescents to eat family meals at home on most days of the week, says a US-based study.
 
 
 

Latest from the Network

Australian hunter pokes crocodile's eye to survive
Sydney, Sep 20 (IANS) An Australian hunter has claimed to have escaped literally from the jaws of death, saying he saved himself in a crocodile attack by poking the reptile in the eye. Stephen Moreen, 20, said he...
Read more on Politics Balla
 
Medvedev slams EU sanctions against Russian banks
Moscow, Sep 20 (IANS) Russian Prime Minister Dmitry Medvedev Saturday criticised the European Union (EU) over its ban on Russian banks, warning that the 28-member bloc will pay the price. The latest EU sanctions...
Read more on Politics Balla
 
Israeli drone crashes in Lebanon
Jerusalem, Sep 20 (IANS) The Israeli military Saturday confirmed that one of its surveillance drones crashed in southern Lebanon due to a technical malfunction. The miniature drone was on a routine patrol along the...
Read more on Politics Balla
 
Beijing holds air defence drill
Beijing, Sep 20 (IANS) Beijing Saturday conducted anti-air strikes drill to enhance measures to handle such attacks. Over 1,800 people from 30 units participated in the manoeuvre, described by authorities as a success...
Read more on Politics Balla
 
45,000 Syrian Kurds reach Turkey to avoid IS attacks
Ankara, Sep 20 (IANS) Some 45,000 Syrian Kurds fleeing Islamic State (IS) attacks on the border region have entered Turkey, deputy Prime Minister Numan Kurtulmus said here Saturday. The Kurds entered southeastern...
Read more on Politics Balla
 
TSMC’s 20-Nanometer A8 Chip Applied in the iPhone 6 and iPhone 6 Plus
Apple decides to rely on its long term manufacturing partner, as a new analysis reveals that the A8 processor used in the new iPhone 6 and iPhone 6 Plus have been manufactured by TSMC.According to Mac Rumors, the...
Read more on Apple Balla
 
New Zealand PM promises business as usual after winning third term (Roundup)
Wellington, Sep 20 (IANS) New Zealand Prime Minister John Key Saturday promised to lead a government that governs for all New Zealanders after winning a historic third term. Key and his National party also achieved...
Read more on Politics Balla
 
Apple Launches the iPhone 6 and iPhone 6 Plus in US and Canada
The long-awaited launch of the Apple’s next generation smartphones has arrived, as the Cupertino company began selling the iPhone 6 and iPhone 6 Plus on Friday in US and Canada.Unsurprisingly, the excitement of the...
Read more on Apple Balla
 
Chinese province sets up anti-terror law society
Beijing, Sep 20 (IANS) An anti-terrorism law society, one of the few in China specialising in the study of anti-terrorism law, was established Saturday in China's Yunnan province. Based in the law school of Yunnan...
Read more on Politics Balla
 
Jessie Ware would 'love to have a baby'
Jessie Ware would ''love to have a baby.'' The 28-year-old singer can't wait to start a family with her husband Sam Burrows but admits her forthcoming new album 'Tough Love' and subsequent tour have put their baby plans...
Read more on Celebrity Balla