The Times of India reports that Microsoft is offering its Windows Phone operating system to Indian smartphone-makers without requiring its standard licensing fee. The arrangement is meant to help encourage these manufacturers to experiment with Windows Phone, which has just 10 percent of the Indian smartphone market, instead of relying on Google’s Android.
Microsoft has long tried to boost support for the fledgling operating system. It partnered with Nokia to create the Lumia product line, which represents most of the Windows Phone sales in the United States, and is now planning to acquire its phone-making division for $7.9 billion. It offered developers cash to port their apps and partnered with cross-platform development tools to make it easier to justify the creation of a Windows Phone version of a new app. Now it’s waving the licensing fee because it wants Indian smartphone-makers to “experiment.”
This is new territory for Microsoft. The company previously focused on making money when manufacturers used its operating system in their devices. Now it’s planning to make its mobile operating system available for free, and reportedly plans to offer the next version of its desktop operating system to consumers at no cost, because it’s chasing market share for the first time in decades. Windows is no longer the default on either mobile or desktop devices, so Microsoft finds itself in need of a little experimentation, both from itself and from manufacturers.
The Times of India’s report claims that the waived licensing fee is only available to two Indian smartphone-makers. (It also notes that Nokia, which only made Windows Phone devices until it announced an Android-powered smartphone earlier this year, did not have a similar deal.)
This isn’t yet a shift in Microsoft’s strategy so much as it is a trial run in a nascent market. But still: Microsoft even considering waving its fee would’ve been inconceivable not too long ago.
Reactions from around the Web
The Verge places this report in context:
Microsoft is now planning to release Windows Phone 8.1 in the coming months, allowing phone makers to bring low-cost handsets to market. Changes include dual-SIM support and on-screen buttons in an effort to make it easier for Android phone makers to modify their devices for Windows Phone. Microsoft is also helping smaller manufacturers, stores, and operators create white-label Windows Phone devices with low specifications and low prices via a web-based hardware portal.
Farhad Manjoo writes at Slate that Windows is dead:
The Nokia purchase signals the end of Windows as a standalone business. There are now only two ways to sell software. Like Apple, you can make devices that integrate software and hardware together and hope to sell a single, unified, highly profitable product. Or, like Google, you can make software that you give away in the hopes of creating a huge platform from which you can make money in some other way (through ads, in Google’s case).
But you can’t do what Windows did—you can’t make profitable software on other companies’ commodity hardware. Thanks to Android, code is now a commodity, and Windows is dead.
ZDNet’s Mary Jo Foley predicts Microsoft’s future:
Where will Microsoft likely make the most money in the future with its phone line? In apps and services — and some day maybe in hardware to some extent — not in licensing the OS. That’s why the ‘new’ Microsoft may be more OS agnostic than the old Microsoft.
Pando weighs in
I wrote about the commoditization of operating systems last May:
Consumers used to pay hundreds of dollars to upgrade their computers’ operating systems once every few years. Then the iPhone came and offered free yearly updates, changing consumers’ perception of upgrade cycles just as it did with almost every other aspect of software. Android did the same not long after. And then Apple shifted OS X to a yearly upgrade cycle, cut the cost of upgrading from $129 to $29 and, now, $19, and moved away from upgrade DVDs to direct downloads.
I wrote in December that Microsoft’s Nokia acquisition demonstrated the threat to Android’s business model:
It seems that the idea of creating software and allowing manufacturers to use it willy-nilly is becoming an increasingly unattractive proposition for large companies. Apple never really embraced that model; Microsoft is abandoning it by trying to acquire the only manufacturer that truly matters to Windows Phone’s success; and even Google is starting to focus more on its own products than on creating platforms through which other companies (ahem, Samsung and Amazon) can get rich.