Microsoft Hopes that a “Royalty Free OS” Will Bring More Windows Mobile Devices to Market

Carrie Sylvester
Apr 7, 2014

Microsoft held Build 2014, its annual development conference in San Francisco, CA the first week of April 2014. The company made several announcements during the 2-day conference but one of the biggest was that it will be offering a royalty-free Windows Phone licensing (Yes, that’s $0) program for partners developing smartphones and tablets with screens smaller than nine inches.

So why make Windows Phone royalty free? Microsoft is hoping this new approach will allow partners to offer lower-cost devices in the highly competitive smartphone and tablet markets.

U.S. and European mobile markets are mature, but there is still a considerable user base that is up for grabs; and that is users in developing markets who have yet to buy their first smartphone. These people do not currently have any loyalty to iOS or Android, so Windows could appeal just as much, maybe more, than the other operating systems especially in the areas where Windows-based PCs have an established user base.

In these developing areas, a high-priced top-of-the-line handset costing over $300 would be far too expensive. Playing in the lower end of the market will be the sweet spot. If smartphones can reach the under $150 price point, they will have the best chance to penetrate developing regions which will surely be more budget-conscious as they look to buy their first smartphone. Lowering the overall cost by removing the cost of the operating system license will have a significant impact on manufacturers. A smart move by Microsoft for sure.

As Android and iOS continue to battle to win the race as the most popular mobile platform Microsoft hopes that its slow and steady approach will ultimately make them a contender in the top 3 of the mobile OS race. Industry pundits may speculate that Microsoft is a day late and a dollar short and will not be able to compete with the popularity of iOS or Android. Although that may be true, it will be sometime before we see the true impact, but we believe it is a step in the right direction for Microsoft.

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