Microsoft may drop Windows Phone and Windows RT license fees

Robert Nelson - Dec 11, 2013, 1:20pm CST
Microsoft may drop Windows Phone and Windows RT license fees

Microsoft appears to be considering a shift in strategy. The shift, assuming they move forward, would be one that would have them acting a bit more like Google. That is to say, giving Windows Phone and Windows RT to device makers for free and looking to supplement with advertisements and subscription revenue. Details here come by way of The Verge who are reporting the free versions are under “serious consideration” by Terry Myerson.

The interesting aspect here comes looking at Windows Phone and Nokia. While Microsoft currently earns revenue from Windows Phone licenses, we have to remember the vast majority comes by way of Nokia. A company that Microsoft recent acquired. At present Nokia has a bit more than 80 percent market share here. So in theory, it seems Microsoft may be considering this route to battle something that has already been set in motion.

To make up the loss of revenue, Microsoft could be looking to take advantage of subscription services and to some extent, advertising. The service revenue could come from a variety of sources including Skype as well as Office and SkyDrive. Some of the other options include built-in Bing search results as well as ads from Windows 8 apps, something Microsoft has been experimenting with as of late.

This also goes back to an older rumor dealing with HTC. There had been talk about HTC moving forward with some Windows Phone device. We have yet to see this happen, but at the time there was talk of Microsoft either removing, or slashing the cost of the license. While this all brings some comparison to Google in terms of advertisement revenue, there is the other side that brings an Apple connection.

With Nokia being acquired by Microsoft and them having a greater than 80 percent share of device shipped with Windows Phone — they are starting to look a bit like Apple with the iPhone and iOS. Otherwise, a solid timeline has yet to be revealed in terms of when this may be happening, but for now there was talk of the free versions arriving with the “Threshold” update in place. That was detailed earlier in the week and includes a full return of the Start Menu.

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