Microsoft considering dropping Windows Phone and Windows RT license fees

MicrosoftWhile Microsoft may now have the third most popular mobile operating system with Windows Phone, its market share remains in the low single digits (3.6% in Q3 2013 according to Gartner). Smartphone and tablet manufacturers have not, for the most part, embraced it or Windows RT and part of the reason is that Microsoft charges a licensing fee for each copy sold. With competition as heated as it has been and profitability proving elusive for many, that cost has likely been one that few have been willing to swallow. But what if Microsoft decided to offer Windows Phone and Windows RT for free?

The idea is getting “serious consideration” according to The Verge sources. The decision is still under review and will likely depend on Microsoft finding a model that allows it to recoup the lost revenues using alternatives. Among these could be ads within Windows 8 apps and Bing search results and subscriptions to services like SkyDrive, Office, and Skype.

Early signs of such a move surfaced back in October when a report suggested that Microsoft had approached HTC with a proposal to eliminate licensing fees in a bid to convince it to offer Windows Phone 8 smartphones again. Should HTC agree to such a deal, could it be a litmus test for Microsoft to see how successful the new model could be before considering expanding it further? It could also run this experiment with its soon-to-be acquired Nokia smartphone and tablet business.

Whether Microsoft decides to drop its Windows Phone and Windows RT license fees, it remains to be seen if these free operating systems will be enough to woo manufacturers back to the Windows fold remains to be seen. A decision is not expected until 2015 when the next major versions of Windows and Windows Phone (known as Project Threshold).

Source : The Verge