Microsoft takes on the free OS The company is inching toward - TopicsExpress



          

Microsoft takes on the free OS The company is inching toward offering its Windows Phone operating system gratis in some markets. Does that portend big changes in Microsofts strategy? A longtime Microsoft analyst weighs in. Microsoft is taking baby steps toward offering its operating system for free or on the cheap -- a necessary tactic in a world dominated by Googles Android and other up-and-coming free operating systems, an analyst tells CNET. As reported by the Times of India this week, Microsoft had been in negotiations with Indian phone companies to produce affordable Windows Phone devices since last year. The agreement was clinched when Microsoft agreed to offer the Windows Phone OS sans the usual licensing fee, according to the Times. Microsoft said to CNET in a statement that it cannot discuss confidential licensing terms. Its a calculated risk to see how it works, said Bob ODonnell, principal analyst at Technalysis Research. The Windows Phone OS has less than a 10 percent share of Indias smartphone market, which is dominated by Android, according to IDC. Microsoft fell behind Android and Apple when it missed the move to mobile, not offering the Windows Phone OS until 2010, long after Google and Apple jumped in the market. Former CEO Steve Ballmer said as much earlier this month. We would have a stronger position in the phone market today if I could redo the last 10 years, he said, speaking in the UK. The company has reason to be somewhat optimistic, however. IDC forecasts that its share of the smartphone market will only increase in the coming years. To make this happen, emerging markets present a special challenge, where operating systems like Firefox and even Linuxs Ubuntu -- both free -- could gain traction. Theres a lot of potential in these markets for alternatives, ODonnell said. So, how will Microsoft compensate down the road if it relies less on Windows licensing revenues for consumer products, which still account for a large chunk of sales. Increasingly were going to see business models change anyway, with revenue generated by services added on top of the OS. So, this is a chance to get their foot in the door. ODonnell gave examples such as Office 365, Skydrive, Skype, and music services. If it does work well, I wouldnt be surprised to see them do it in other large markets, he added. And Microsoft is rethinking licensing fees with larger devices too, like tablets. It has already lowered licensing fees for sub-$250 PCs, ODonnell said. That helps tablet makers like Dell sell its 32GB Venue 8 tablet for $229 or Lenovo offer its Miix 2 8-inch tablet for $249. But baby steps is the operative phrase for Microsofts rethink. Its not going to happen overnight, ODonnell said.
Posted on: Mon, 17 Mar 2014 08:53:57 +0000

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