Last month at the Mobile World Congress in Barcelona, Microsoft announced that more phone makers, including two from India — Lava and Karbonn — will produce Windows Phone devices in the coming months. Both companies already make Android devices using Google's mobile OS which is free to use. Their Windows Phone devices are likely to hit the market in the next few months.
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. But the agreements were clinched only when Microsoft agreed to remove the licence fee it charges from phone makers for its OS.
This is unprecedented. Microsoft didn't even give the OS free to Nokia, which agreed to exclusively make Windows Phone in 2011. It reportedly charged Nokia between $20 to $30 for each Lumia device the Finnish company sold. Making the OS free also shows signs of growing frustration within the company at the lack of traction for Windows Phone in the market.
Historically, licensing the software has always been bread and butter for Microsoft. "For our planned Windows Phone handsets, we are not paying Microsoft a licence fee. The company is obviously exploring new models for Windows Phone. It must have realized that the older model where it licenced the OS did not work out well, even with Nokia's support," a senior executive with an Indian phone company told TOI.
While Microsoft is likely to offer Windows Phone OS to other manufacturers, including the global companies, under similar terms, the agreements with the two Indian firms are specific to them.
A Microsoft spokesperson refused to comment on the specifics of the talks the company held with Indian phone makers . But, the spokesperson said, "We have extensive programmes to help our partners build great devices. Our licensing model allows us to partner with OEMs across the world."
"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 licence fee, it becomes easier for us to experiment with it," said another senior executive.
According to the latest IDC figures, Windows Phone OS has less than 10% share in India's smartphone market, which is dominated by Android. An IDC analyst said the "free" Windows Phone will definitely help Microsoft.
"If Microsoft has decided to waive the licence fee for Windows Phone, it is great news for local phone makers. Local phone makers are comfortable with Android. They are still not sure of the appeal of Windows Phone. If the OS is free to use, they will feel more confident while experimenting with it in the market," said Manasi Yadav, a senior market analyst at IDC.
Ref - TOI
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