Microsoft, Windows Phone makers change tactics in search of share

Microsoft, Windows Phone makers change tactics in search of share

Summary: Microsoft and Windows Phone makers are experimenting with new OS licensing options in an attempt to try to grow Windows Phone's market share beyond four percent globally.

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Microsoft and its Windows Phone maker partners are changing the tried and true ways of licensing Microsoft's Windows Phone operating system in the hopes of stimulating demand.

huaweiwinphone

The Times of India reported on March 13 that Microsoft is making its Windows Phone operating systemavailable for free to two of its newly-signed Windows Phone partners: Lava (Xolo) and Karbonn. There have been previous reports that Microsoft was willing to drop its per-device phone operating-system license fee to zero, but The Times of India is citing unnamed, multiple industry sources claiming that giving away the Windows Phone OS for free was key to Microsoft's ability to sign on these new partners.

Microsoft isn't commenting on the report.

Microsoft hasn't disclosed how much it charges phone makers per device for the Windows Phone OS. I've seen reports of anywhere from $5 to more than $30 per phone. The price is likely dependent on volume of phones built/sold.

Meanwhile, another March 13 report -- this one in TrustedReviews.com -- quotes an official with Huawei, another Microsoft Windows Phone partner, as saying Huawei will bring a dual-boot Windows Phone/Android device to market this year. This isn't, as some have believed, a phone which would provide carriers and/or users with a one-time choice between the two operating systems. Instead, it would be a device that would allow users to switch at will between the two operating systems.

Huawei's Chief Marketing Officer told Trusted Reviews that the company is planning to deliver the dual-OS phones to U.S. customers in the second quarter of 2014. He also said the company is still committed to making Windows Phones, but didn't specify whether that means Windows Phone-only devices in addition to the dual-boot phones.

Microsoft is relaxing its licensing terms and conditions in order to attract new Windows Phone partners even though it is preparing to offer its own phones once its acquisition of Nokia's handset business is approved by antitrust officials around the globe and Microsoft takes ownership. The company has removed certain requirements, such as dedicated capacitive buttons on Windows Phone handsets, so OEMs can opt to put Android or Windows Phone OS on the same device to allow those OEMs to cut costs.

Nokia recently launched three new phones that run Android as their core with various Nokia services taking the place of the typical Google ones that come with Android phones. Microsoft will be the owner of those new Nokia X devices once Microsoft officially acquires Nokia.

I, myself, would think offering users a choice of OSes on a single phone as Huawei is seemingly planning would be more confusing than anything else. It's hard to see why users would use the Windows Phone OS at all if Huawei is planning to offer the full Android/Google stack, plus all the apps in the Google Play Store. It's not clear from the Trusted Reviews post if that's definitely part of Huawei's plan, however.

Microsoft is counting on continuing to target the lower end of the phone market as the one where it has the biggest potential for volume growth with Windows Phone. Windows Phone's market share is still hovering around four percent globally.

(Thanks to Bilal Khan for the heads up on the Times of India story, and to the Verge for the pointer to TrustedReviews' piece on Huawei.)

Topics: Mobility, Microsoft, Mobile OS, Smartphones, Windows Phone

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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69 comments
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  • It makes Windows Phones cheaper to build...

    I think this is a good idea (and would've been a GREAT idea a year ago). Now, seemingly, it's cheaper to produce a Windows Phone than an Android one. Additionally, there's now no additional hardware cost for an OEM to build a Windows Phone.

    So what are we left with? Microsoft can differentiate Windows Phones with its Nokia hardware... and then try to sell the OS on its own merits and/or by having exclusive apps--like Office, Xbox Games, etc.

    I mean, it can't hurt.
    cybersaurusrex
    • Oh, but they should kill the Nokia X...

      I think the Nokia X is a bad idea... for Microsoft. It might've made sense for an independently-owned Nokia... but after the merger, it just seems to undermine Windows Phone. Instead, they should fit Windows 7 or 8 (if possible) onto cheap phones and scrap Asha.
      cybersaurusrex
      • It depends

        If Microsoft is still the old Microsoft, with their primary mission being the propagation of various versions of Windows (and of course, the app sales that those copies of Windows enable), then no, the Android phone is a bad idea. They might better spend their efforts working on a lower Windows Phone footprint that can compete -- the Nokia X devices start at about 1/2 the price of the cheapest Windows Phone.

        On the other hand, if you believe that Microsoft's real mission is this new "Devices and Services" thing, then that all changes. Windows can no longer be the only answer, but simply one means to an end, that end being to place as many devices in users' hands, and get them connected to Microsoft's services. If they can't achieve that with Windows, they need to support other options. So in this model, Android is a good move.

        It has to be one or the other, Microsoft can't be both of these companies. But they do get to choose which one they'd like to be.
        Hazydave
    • I can understand why this needs to be done

      They're basically asking them to buy a license per phone, while at the same time building your own model through their soon to be Nokia division.

      Things have changed (or will, with the closing of the Nokia deal) and not all things are "equal" now

      Why jump into those uncertain waters? This isn't like MS building just 2 Surface tablets models, this is MS building 10 different mid to high end phones.
      William.Farrel
    • cell phone compatiblity

      Why cant all manufacturer be forced or required to allow to work on all cell carriers networks and beable to choose what os you want on the phone as well as using a universal charger and data cable.
      tcg2ki
  • Why dual OS

    "It's hard to see why users would use the Windows Phone OS at all if Huawei is planning to offer the full Android/Google stack"

    This problem is exactly the same when buying any other WP handset, except the user is unlikely to make an informed decision at that point. If the buyer thinks the full Android/Google stack is superior, that buyer won't buy a phone that doesn't run Android.

    To gain market entry in a brown-field tech-market, 2 things have to happen: First, the technology has to be good enough that users don't dismiss it outright. Second, users of competing technology need to get familiar with the new technology.
    The dual OS helps with the second step. If WP isn't good enough that a fair share of the dual OS phone's owners end up using it, the first step failed.
    Sacr
    • WP is good enough

      the update to 8.1 should put the OS on par with IOS and Android. The only remaining issue is the App gap which has been closing year after year. If the big named apps continue to roll in and MS continues to work towards a unified app experience between the Windows Store & WP devs would be foolish to ignore this platform. If there are over 100 Million Win 8 licenses in circulation plus another 60 Million WP users that's a huge chunk of people that need quality apps.
      Rob.sharp
      • Well...

        If only they ran the same apps. But developers have to code differently for Windows Phone and for Windows Metro on Windows 8.1. And it's even more complicated than that. Windows Phone and Metro/WinRT are closer, but Windows RT is all but dead. Folks supporting Windows 8.1 are certainly not going to leave the tablet owners out of the picture, but they're developing "hybrid" applications, which often means Metro UI with Win32 under the hood. And so, not very close to Windows Phone.

        And there are apparently more like 200 million Windows 8.x licenses in circulation. However, only an estimated 60% of those are being used for Windows 8. Between Windows 8 downgrades ordered by consumers, and corporate licensees, who are counted as Windows 8 but can install any version of Windows under that license (and almost certainly do), that's not a problem for Windows per se... Windows is Windows to a developer. Well, a Win32 developer. Then, of those 120M or whatever actual Windows 8.x users, how many actually care about Metro? How many are really doing most of their Windows-ing with the Microsoft Store? That's certainly nowhere near those numbers.

        Then look at the other guys. In less than half the time Windows 8.x has been out, Apple upgraded about 650M iOS users to iOS 7. Sure, it didn't cost anything, but that's not important to developers. They just need the customer there to buy their product. How many of these folks are really tempted by even 60M Windows Phone users, versus making a new iOS application. Or supporting the over 1000M Android users?
        Hazydave
        • Want but never use

          Dual boot is an idea that would attract a lot of users. Many would never use it but just want it. Even those that play with it would probably settle on one after awhile. It just excites the imagination and being practical is irrelevant.
          MichaelInMA
      • Disagree

        The gap between iOS and Android has been narrowing but having been a Windows Phone user I can tell you it's not like that.

        It's not just having a larger number of popular apps. MS doesn't put a priority on their App Store. There are a lot of crummy apps for iOS and Android, but Windows Phone takes the cake in this department.

        There are so many apps in Windows Store with 1 star ratings. I've never seen such a desolate environment. The Windows App Store as a whole is terrible. MS doesn't have any love for their App Store and it shows.

        There's a reason why Windows Phone has only 3% market share in the US and it's not because people are ignorant to how it works or what it can do for them.
        Maha888
  • Price isn't the issue

    they got behind in the game to Android and Apple and , at least yet, they aren't offering that much of a compelling reason for people to switch. No Physican QWERTY keyboard model for those that might prefer that (younger people who want to text/email more efficiently). If they continue to evolve the product they MAY get Windows Phone more accepted into the business realm (probably going to have to spend some significant $$ and effort to get more business partners to support the Windows Phone platform). My girlfriend was migrating from Blackberry so she took a chance on Windows Phone and she is somewhat happy with her choice. As a long time Symbian user, I wanted something more open (unlocked) and mature than what Windows Phone was approx. 2 years ago. I will keep an eye on Windows Phone, but unless there is something pretty compelling (i.e. more useful to me on Windows Phone than what I can get with Android ), I will likely not make the switch.
    jkohut
  • I don't get this comment -

    "It's hard to see why users would use the Windows Phone OS". I don't see why anyone would choose the Android stack if given a choice on the same phone.

    That's beside the point, I don't see many users thinking about the OS at all. I have coworkers with Android phones and I've asked and not one picked it because it runs Android. They picked it because they liked the phone or liked Samsung, and the phone just happens to run Android. Neither do people pick an Apple product because of iOS.

    I think bloggers and the technical inclinded pick something for an OS, but the vast majority of users don't. They pick it because of the phone, the manufacturer, or all too often because the salesperson recommends one.
    Skippy99
    • "too often because the salesperson recommends one"

      You reckon phone buyers are that stupid? I don't.

      And if it was true, Windows would do much better with all the inducements they're giving to sellers.

      Price is the biggest single issue. And Winphones are still overpriced in many areas, though heavily subsidized in others. Weird, but true.
      Heenan73
      • Actually not the case.

        If you take sometime and do a bit of search, you'd find a good number of complains from customers who were questioned, ridiculed and turned-away by AT&T and Verizon sales person. This is when customer goes in a directly ask for a windows phone too, imagine how much support they would get if they go in clueless.

        If Microsoft is giving incentives to sales person, they are obviously way outmatched by the other companies.
        xelsm
        • RE: Actually not the case.

          I've witnessed this myself on several occasions. It does happen and I suspect it's more widespread than most people would guess.
          kb5ynf
        • Ridiculed

          If salespeople are ridiculing Windows Phone maybe there's a reason for it. When a salesperson compares the App Store for Windows to Android or iOS they should be ridiculed. The app stores for Android and iOS are not just bigger but get better support and I am a former Windows Phone user.

          You people make it sound like Windows Phone is just as good as Android and iOS and it's not. There's a reason for Microsoft's paltry 3% market share in the U.S. and it's not because of what Joe Shmoe said at the kiosk.
          Maha888
          • WP8 and the App Store

            Maha888, it is interesting you harp on about the WP* apps store but say nothing about the WP8 as a communications device and its UI.

            As a current user of WP8 I find it excellent, and because I have a Nokia I also get, free of charge on my so-called low-end Lumia 520 the very good Nokia ("HERE") maps, which include satnav.

            I live in London and have excellent public transport apps, especially for the bus network. I have a bunch of other very useful apps. Even a few games, none of which I have paid for.

            Perhaps you just want to play games on your phone?
            DAS01
          • @Maha888

            "There's a reason for Microsoft's paltry 3% market share in the U.S. "

            Market share cannot be used for comparisons. Not at all. Because iPhone which is selling well in US is not at all selling in India. It might have 1% market share here in India. It doesn't mean that it is bad. Market share depends on how popular a certain device, how it looks, how many popular games it has, number of local apps in the store, price, etc. Not just the UX of the phone.

            "The app stores for Android and iOS are not just bigger but get better support"
            Those apps in the WP also get the same treatment as their counterparts in other OS'. You can give app gap as a reason and not app support.
            spicycheeks
      • Maybe "stupid" is not the right word

        But the vast majority of buyers are certainly swayed by what the sales person suggests. They trust the sales person to be more knowledgeable than they, because it's the sales person's job.

        So if the sales person is not familiar with Windows phone, or if he has 100 android phones on display and only one windows phone, he's going to be promoting Android more than windows.
        vincewansink
        • well according to MS sheep, stupid

          is anybody using iOS, we have read it here many times.

          Now, not only Katrina is responsable for the low sales of WP8 (according to Ballmer), we must realize that also is because stupid people influenced by stupid salespeople, buying devices for the stupid segment of the population.
          theo_durcan