Microsoft has made a break from tradition by licensing Windows Phone 8.1 to some Indian smartphone makers for free.
The Times of India reported on March 13 that Lava and Karbonn, which Microsoft welcomed as new Windows Phone licensees during this year's Mobile World Congress in Barcelona, Spain, have had their fees waived. In effect, they will be able to bring Windows Phones to market without paying Microsoft a cent.
"Multiple industry sources with knowledge of Microsoft's negotiations with Indian phone companies told TOI that it was in talks with local firms to produce affordable Windows Phone devices since last year," stated the report. Indications are that Lava and Karbonn, which already produce phones based on the rival Android platform, drove a hard bargain, one which Microsoft agreed to honor.
"But the agreements were clinched only when Microsoft agreed to remove the license fee it charges from phone makers for its OS," wrote The Times of India's Javed Anwer. He added that "the agreements with the two Indian firms are specific to them," although Microsoft is likely to ink similar deals with other OEMs.
A spokesperson for the software giant told Anwer, "We have extensive programmes to help our partners build great devices. Our licensing model allows us to partner with OEMs across the world."
Microsoft appears to be taking a page from Google's mobile playbook in its bid to catch up to Android and iOS. In all of 2013—the first year worldwide smartphone shipments crossed the 1 billion unit mark—Android and Apple iOS accounted for 93.8 percent of all smartphone shipments, said market research firm IDC.
As per the Android Open Source Project's policies, Google does not charge OEMs fees for the Android OS. Apple is the only producer of iPhones, which run iOS, rendering OEM licensing schemes moot.
The news comes after reports that Microsoft was considering slashing the licensing fees of Windows Phone 8.1 by up to 70 percent. Microsoft is rumored to be mulling a similar move for low-cost Windows 8.1 devices (sub-$250) to counter the rising popularity of Google's Chrome OS.
Estimates of how much Microsoft charges for Windows Phone vary widely, from $23 to $30 per device, according to handset maker ZTE, and $5 to $15, according to a report in The Verge. The software maker is currently gearing up for the release of Windows Phone 8.1, which is expected to include its answer to Apple's Siri.
Named Cortana, after the holographic AI in the Halo video game series, the digital assistant will provide voice-enabled search and control over some mobile OS functions. Cortana will leverage Bing, Foursquare and other online services to deliver functionality similar to Google Now's contextual search.