Microsoft is reportedly on the verge of slashing Windows Phone 8 licensing fees, a move that may help the company make gains against Android and iOS, the current mobile operating system champs. The software giant is said to be mulling a similar gambit to shore up OEM support for low-cost Windows 8.1 tablets and other devices.
During Mobile World Congress in Barcelona, Spain, Infosonics CEO Joseph Ram Sascha Segan told PCMag that his company is "hearing Microsoft will drop the license fee quite a bit, as far as 70 percent, which will make their product more competitive in terms of price." Infosonics is a provider of low-cost Android handsets to Latin American markets as well as unlocked devices for the United States.
Windows Phone licenses cost between $23 and $30, according to handset maker ZTE. Ram also told PCMag, "We're seeing trends that Microsoft is working with major chip makers to create the right ecosystem to be able to bring cheaper products to market." He added that under the new pricing scheme, it wouldn't be hard to introduce Windows Phones that are price-competitive with Android.
In a smartphone market currently dominated by Android devices like Samsung's popular Galaxy handsets and Apple's iPhone, Microsoft lags far behind. The company made a bold move to reverse its mobile fortunes, when in September, after months of rumors, it announced the acquisition of Nokia's mobile hardware unit for $7.1 billion. Nokia is Microsoft's premier Windows Phone partner.
There are signs that Microsoft made a good bet in snapping up Nokia. Kantar Worldpanel ComTech released a report Nov. 4 that pointed to encouraging Windows Phone growth in Europe and Latin America. "Nokia dominated in Latin America for many years, and while its popularity declined with the fortunes of Symbian, it now has an opportunity to regain the top spot," Dominic Sunnebo, a strategic insight director at the research firm, said in a statement.
Microsoft may be looking to keep that momentum going by courting OEMs with lower licensing fees, a tactic that the company is exploring to help its Windows 8.1 operating system claw market share away from Android and iOS tablets.
Nokia's Windows Phones are generally praised by reviewers for their top-tier build quality, snappy performance, and class-leading cameras on some models. Its new flagship, the Lumia Icon, sports a crisp 5-inch full-HD OLED screen and a 20-megapixel PureView camera. Yet despite desirable hardware, the handsets are hobbled by an anemic Windows Store apps marketplace when compared to the Apple App Store and Google Play.
Nokia also made waves at this year's MWC by unveiling a new line of affordable smartphones for emerging markets based on the Android Open Source Project (AOSP). Dubbed the Nokia X line, the low-cost smartphones sport a custom user experience that resembles Windows Phone's tiled interface and swaps out Google's built-in services with counterparts from Microsoft (Skype, OneDrive and Outlook.com).