Microsoft resets Windows Phone to reach lower cost markets

Sun Feb 23, 2014 5:53pm EST
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By Paul Sandle

BARCELONA (Reuters) - Microsoft Corp is pushing to reach a far wider audience for smartphones running its Windows Phone software by turning to cheaper chipsets and easing restrictions on how phone makers use its software to encourage them to drive down costs.

Nick Parker, Microsoft's senior vice president for handset makers, said the changes have attracted a range of new handset makers to build Windows Phones, including South Korea's LG Electronics, India's Xola and Karbonn, and ZTE, Foxconn, Lenovo, Gionee and Longcheer.

"We are open for business on Windows Phone to anyone who wants to build a Windows phone," Parker said at the Mobile World Congress trade fair on Sunday.

Windows Phones typically sell for several hundred dollars a piece, although Nokia's Lumia 520 handset has an unsubsidized price of about 139 euros ($190) in Europe.

The sub-$100 smartphone market, however, is dominated by Google's Android operating system, which has lower licensing costs, is more adaptable by device makers, and runs on more, and cheaper, chip sets that run radio and other functions.

Android phones from dozens of handset makers accounted for almost four out of every five smartphones sold, or 781.2 million units, last year, according to Strategy Analytics.

Microsoft was a distant third in market share terms, behind Apple, which shipped 153.4 million smartphones.

Some 5.7 million Windows Mobile units were shipped worldwide, Strategy Analytics said. While it gained a more than 10 percent share in some markets, for example Italy, other markets like the United States remained tough, Vice President Joe Belgiore said in Barcelona.   Continued...

A Windows Nokia Phone is seen on display at Microsoft's annual shareholder meeting in Bellevue, Washington November 19, 2013. REUTERS/Jason Redmond