Microsoft makes Windows Phone free (to select OEMs)

There’s one manufacturer which rules the Windows Phone roost, it’s a brand we’ve all heard of and most of us will have owned a device from at some point… it's the Finnish legends at Nokia.

Whilst Windows Phone is available to other OEMs - with a license-fee - there has been little interest; only a limited amounts of handsets have been released so far from the likes of Samsung, HTC, and Huawei…

Perhaps taking a look at the problems faced by OEMs in the Android market – who struggle to compete in market share against Samsung – Microsoft is said to be dropping the license fee altogether and make Windows Phone, like Android, completely free to manufacture for...

This should make the rising-platform more appealing to manufacturers; creating a more steady-market of devices and healthier competition. The more Windows Phones in stores, the more consumers are likely to pick up and experience the unique benefits offered by Microsoft’s mobile OS – especially when pitted against the 80% of the store (at a guess) which are Android handsets.

Of course this is a very different move for Microsoft – who gains the majority of their profits in license fees through the many Windows PCs occupying consumers’ and enterprises’ desks…

The Redmond-based company is said to have already waived the license fee for two Indian phone makers – Karbonn and Lava (Xolo). These two OEMs are new to Windows Phone, and currently only create low-cost Android handsets. It’s thought that – although in talks previously – both manufacturers only agreed to build Windows Phones after the license fee was dropped.

Windows Phone’s best-selling device worldwide is Nokia’s low-cost Lumia 520, further repeats of this success in India is sure to be promoted.

The move on mobile would follow a similar strategy from Microsoft on the desktop; where license fees have also been cut 70%. What’s more interesting is for the end-consumer, who it is said will soon have the option of a completely free “Bing” version of Windows.

What do you think of Microsoft’s move to scrap license fees across Windows?

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21 Mar 2014, 8:11 a.m.

This is the second shoe dropping on the migration to services based business model. Affectionately known as the razors-razor blades model. This now focuses vendors on services pricing to recoup investments in the platform. Google has an edge as its model is predicated on advertising. But there are also many changes afoot in advertising to more automated systems. These systems drive higher conversions through aggregation of data implemented proactively through new channels.

So for the OEM little has changed. Unless the OEM has their own services deployed on their devices they will remain low margin business and a razor selling other companies blades.