Microsoft is currently in discussions with nine new hardware vendors to create Windows Phone devices. While only two of them, LG and Lenovo, are well known in North America (and the latter only moderately), the mobile OS is blowing up in parts of Europe, Asia and South America. Much of that growth is owed to Nokia’s ultra low-cost Lumia 520, which comprised nearly 70% of all Windows Phone sales last year.
Now that Microsoft is wooing other OEMs, it may be forced to significantly lower the licensing costs it charges per device: an estimate in the realm of 70% has been rumoured. The current cost per device, shared by ZTE in late 2012, is estimated to be between $23-30USD, a huge burden on the already-strained resources of some of these small companies. This is why Android, a free and open-sourced OS, has been the go-to mobile operating system for low-cost manufacturers in China, India and South America. Microsoft, in an effort to increase market share worldwide, may decide to eat the costs.
The price of a good smartphone is dropping, and Microsoft cannot afford to burden its OEM partners with undue fees, especially if it means the difference between a device going into production or staying a prototype. Recently, Microsoft began altering the way Windows Phone works to make it easier for existing Android-based manufacturers to reuse casings for Windows Phone products. It also plans to unite the development resources of Windows and Windows Phone, making it easier for developers to create a single app to deploy to multiple screens and screen sizes.
We’ll likely know more about this when Microsoft launches Windows Phone 8.1 in the coming months.