Microsoft Rumored to Offer Windows Phone for Free to OEMs

The move is likely to be made once “Threshold” update goes live

Since Microsoft’s acquisition of Nokia has already been approved, the Redmond-based company is now looking for a way to expand its presence on the Windows Phone market and increase its revenue.

According to The Verge, sources close to the matter claim that Microsoft may offer Windows Phone for free to handset manufacturers in an attempt to improve Windows Phone market share.

The move does make sense if we take into consideration that Nokia was the main source of Microsoft revenue that came from licensing Windows Phone platform.

With more than 80% market share on the Windows Phone market, Nokia’s handset and services division will become part of Microsoft, thus the main source for profit coming from Windows Phone licensing would evaporate.

It looks like Microsoft is now planning to turn it into a positive thing by offering OEMs the possibility to license Windows Phone for free.

This is meant to increase the production of Windows Phone handsets in the future and improve devs’ interest in creating more apps for the platform.

The Verge claims that Microsoft’s Terry Myerson plans to remove the licensing fee for Windows Phone platform once the company starts delivering the rumored “Threshold” update.

Although Microsoft’s strategy on Windows Phone licensing is not yet set in stone and things might change by the time Threshold arrives, everything points to this move.

Microsoft is looking into ways to replace this profit source with ad-related features for some of its operating systems and services, such as SkyDrive, Office and Skype.

The company may attempt to attract more customers into subscribing to these services, while Windows 8 apps ads and any revenues coming from Bing would help keep the profit balance when Microsoft decides to offer Windows Phone for free to handset makers.

We will probably know more details once the Microsoft/Nokia deal completes, so stay tuned for additional info on the matter.

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