On Tuesday, Microsoft introduced Windows 10, a new version of its desktop OS that it hopes will continue to blur the lines between mobile and desktop operating systems. But Windows really started to go in a different direction earlier this year, when Microsoft announced that devices with screens smaller than 9 inches could forgo the licensing fee and run either Windows 8.1 or Windows Phone for free. According to Microsoft, it’s a success: executive Terry Myerson said yesterday that 50 new companies have started making Windows Phones and tablets since the program started.
At a glance, it appears to be true — there are a lot of new companies selling Windows Phones. Earlier this year, models from brands like Blu, Prestigo, and Yezz hit the market. There are certainly several other companies virtually unknown in the United States making devices running Microsoft’s mobile OS. As [company]Microsoft[/company] sets its mobile hopes on the low end of the market, it will need partners prepared to take razor-thin margins on sub-$200 devices.
But simply having more options available doesn’t necessarily amount to a greater proportion of market share. In addition, Windows Phone requires its devices to use a [company]Qualcomm[/company] chip, which is usually more expensive than low-cost MediaTek processors that power many Android phones and tablets.
Microsoft didn’t announce how it planned to sell Windows 10 when it launches late next year. Since it will work across desktops, tablets, and phones, perhaps the old way of selling licenses may not work anymore, plus, many consumers now expect their OS updates to be free. It looks like Windows Phone makers can expect the same, as Myerson said he expects the free Windows program to continue. Microsoft still makes royalties on laptops and tablets over 9-inches, but if it plans to eschew mobile licensing fees for the foreseeable future, it will need to recoup those device royalties one way or another, either through paid Microsoft services or fees from the Windows app store.