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Microsoft May Offer Windows Phone, RT Free to OEMs

Unnamed sources have informed The Verge that Microsoft's Terry Myerson is seriously considering offering future builds of Windows Phone and Windows RT to device makers free of charge. This move would be part of a broader set of changes that will supposedly take place in the "Threshold" rollout in Spring 2015.

A good portion of Microsoft revenue stems from licensing its operating systems to manufacturers of desktops, laptops, phones and tablets. However, on the phone front, that's about to change. Nokia was over 80 percent of Microsoft's Windows Phone sales, and once the acquisition gets the green light from all parties involved, that licensing revenue will be no more.

So how do you replace that lost revenue? How about throwing advertisements into Windows 8 apps for starters. Ads are already a part of the Bing search results in Windows 8, but all those free apps listed on Windows Store could be injected with ads as well. The company will also likely try to convince customers to subscribe to services like SkyDrive, Skype and Microsoft Office.

By taking the free route, Microsoft is obviously going after Google's share of the tablet and smartphone market. Google doesn't charge OEMs for using the Android platform, but instead makes its revenue from ads and media sales. Microsoft could do the same, and may even hurt Apple's market share in the process. Hey, you really can't compete with free.

Currently, Microsoft and Nokia are the only two device makers using the Windows RT platform. By eliminating the licensing fee, that scenario could change dramatically. Up until now, most PC makers have seemingly turned their backs on Windows RT, preferring to use Windows 8 Pro and Android instead. Microsoft is already reportedly talking with HTC in hopes of eliminating the licensing fee if the phone maker installs Windows Phone on Android devices.

  • hannibal
    Cheaper windows based machines... why not!
    Reply
  • de5_Roy
    too little too late, microsoft.
    Reply
  • Avus
    At first, M$ want to be apple, now they want to be Google....
    Reply
  • JD88
    This really isn't a big deal to Microsoft since they sell the majority of Windows RT and WP8 devices themselves anyway. The purpose of this is just to build the platform.

    Reply
  • lathe26
    Free... for now.
    Reply
  • bustapr
    this is what they shoulve done from the beginning. how they expected WinRT platform to be successful at $80 for OEMs when the prime competitor OS is practically free(for the most part) is beyond me...
    Reply
  • burkhartmj
    12164826 said:
    At first, M$ want to be apple, now they want to be Google....

    You say this like it's a bad thing. MS isn't focused enough to mirror Apple's strategy, but they have the resources to do so with Google's strategy. I think if there's a way for WinPhone and/or RT to gain any kind of relevance it's through this strategy. Otherwise, they're making OEM's pay for an OS that is largely unknown and untrusted in the consumer market when a mature and popular platform can be had for free(ish).

    The honest truth is that Google has mostly replaced Apple as Microsoft's biggest competition, and the Googs is clearly doing things right. It's time for MS to consider that and adopt what could help them achieve success.
    Reply
  • belardo
    Hey, you really can't compete with free.
    Uh... if that were true.... then WHY hasn't Linux destroyed Windows yet? Of course we do know why, the design of GNU/Linux which protected it from Microsoft and makes it powerful OS, is also its weakness. Only thing Linux needs is all Adobe products (and yet Adobe is on the "Linux Partners Silver class"), Intuit and better 3rd party video & printer drivers and they are set. MS-Office would help too, but that WON'T happen any time soon.

    People aren't rushing to buy Linux desktops... just as people aren't rushing to buy Windows Phones or tablets.

    Currently, Microsoft and Nokia are the only two device makers using the Windows RT platform. By eliminating the licensing fee, that scenario could change dramatically. Up until now, most PC makers have seemingly turned their backs on Windows RT, preferring to use Windows 8 Pro and Android instead.
    MS & Nokia = same thing, pretty much before the backroom buyout... MS PAID Nokia to make WP phones. If Nokia went with Android, there would be a lot more phones sold in the bright colors. Oh well. And "seemingly", by the fact that only Nokia and MS are the ONLY ones making WP / RT devices is proof of that. Many companies did NOT make RT and WP devices for a reason, the rest... tried, but have pulled out before the 1st year of RT.

    Also, EVERYONE knows that RT is DEAD, other than the novice users who DON'T know they are buying orphaned tablets. In 1-2 years, WP will be expanded to handle tablet screens... why MS even bothered with RT is beyond any reasonable thinking. They didn't learn from Google's own tablet/Phone situation, which is somewhat understandable. Quick history: Google made Android 3.x a TABLET only OS, but were public that 4.0 would be for both devices. The only point of 3.0 was to accelerate the Tablet experience before merging. Otherwise Android 2.x apps works fine on Android 3.... mostly. And until recently, cheap-ass tablets and phones use Android 2.4.

    Meanwhile, MS was stupid enough to make WP8 incompatible with WP7 and RT. WP7 users were screwed. RT users are screwed. An app made for RT will not work on WP or the other way around. Guess how much developers love this?

    Microsoft is already reportedly talking with HTC in hopes of eliminating the licensing fee if the phone maker installs Windows Phone on Android devices.
    So? HTC is struggling to survive. They don't have the resources to support another OS phone line. Their previous WP8 phones didn't sell well, even tho they had some advantages over Nokia. Unless MS pays HTC hundreds of millions of dollars to make an updated WP8 phone.... its not going to happen. HTC took a hit with the Facebook First phone. Which, is really a good little phone in of itself. IMHO, HTC should have re-flash the phones to standard Android 4.x and then sold them.

    Many of us wouldn't use Windows8 on our PCs even if it was free... so the OEM's aren't going to bite. WHY build a product that will NOT be sold? Remember, the $1b loss MS suffered with warehouses of unsold dusty Surface tablets?!
    Reply
  • ethanolson
    If it's going free, then the free editions of Microsoft Office will be stripped out. There'll probably be an icon on there that'll link up with Office 365 to give you Office that way.
    Reply
  • southernshark
    It's about the low end phones. We all saw the article about Nokia developing a low end Android phone (or most of us did anyway who are regular tech readers).

    The reason Nokia had to do that, even when it was owned by MS, was licensing fees. You can't make a cheap phone with an expensive OS. The margins are just too tight. Even though MS owned Nokia, it couldn't give the OS to it's subsidiary while selling it to it's partners. The license fee would still have to be incorporated into the phones cost. Otherwise two things would happy. One it's partners would be upset. Two, it would potentially run afoul of US anti-trust/anti-competition laws if it were doing this.

    By going this route, Nokia won't have to offer a low end Android phone. Instead it can offer a low end Windows RT phone. Additionally, this will effectively make Windows RT cheaper to use than Android, since Android manufacturers have to pay MS fees to use it's patents when they make an Android phone.

    Windows RT will look a lot more attractive to all of the other manufacturers if MS does this simply because the Windows RT license will be cheaper to use. Additionally, most of the companies also make Windows based PCs and laptops so they will only have to deal with one OS producer. We may well see a Samsung Windows phone next year if this happens. And for MS that will be a big deal. For Android, it could be a blow.
    Reply