Thursday, March 13, 2014

Report says Microsoft is waiving Windows Phone fees for at least two Indian OEMs

It's been rumored that Microsoft has been mulling this sort of move, but on Thursday it seems that it has been confirmed, at least for two Indian OEMs. The Times of India reported on Thursday that two Indian device manufacturers will see the normal Windows Phone licensing fees waived, as the Redmond, Wash.-based giant continues to struggle for market share against Android and iOS.

A license fee waiver would, of course, lower the cost of a phone's manufacture, particularly important in developing nations where Google's Android holds sway.

TOI was told by multiple industry sources that Microsoft's negotiations with Indian manufacturers were only sealed when the company agreed to waive the license fee it charges from phone makers for its OS. Although Nokia clearly owns the Windows Phone market, last month, at Mobile World Congress in Barcelona, Spain, Microsoft announced that a number of additional OEMs will build WP devices, including two from India, Lava and Karbonn, which already produce Android phones with Google's free-to-use mobile platform.

It's unclear if Lava and Karbonn are the manufacturers given the waiver. However, an anonymous senior executive with an Indian phone company told TOI:
For our planned Windows Phone handsets, we are not paying Microsoft a license fee. The company is obviously exploring new models for Windows Phone. It must have realized that the older model where it licenxed the OS did not work out well, even with Nokia's support.
A different executive added:
Free Windows Phone is part of a strategic partnership. For both Microsoft and us, it is an experiment. Windows Phone still doesn't have lot of appeal in the market but now that it doesn't have any license fee, it becomes easier for us to experiment with it.
Since licensing fees power much of Microsoft's bottom line, this move could be seen as showing that market share is more important to the giant than pure profit. In January 2012, an executive with ZTE said that Microsoft -- at least then -- charged the OEM between 15 and 20 British pounds (currently $25 to $33) to license the then current Windows Phone 7.

No comments: