BARCELONA, Spain--Microsoft (NASDAQ:MSFT) announced a number of new firms are planning to use its Windows Phone software, many of which were initially skeptical about the mobile OS. The announcement of new partners comes just ahead of Microsoft finalizing its $7.4 billion deal for the handset division of Nokia (NYSE:NOK), the largest maker of Windows Phones.
Microsoft's Nick Parker, left, and Joe Belfiore, discussed changes to Windows Phone at a media event held ahead of the Mobile World Congress trade show.
The news of the additional partners come at a crucial time for Microsoft, not only because of the Nokia acquisition, which could have the potential to alienate other Windows Phone partners, but also because the company is trying to establish itself as the third smartphone ecosystem behind Google's (NASDAQ:GOOG) Android and Apple's (NASDAQ:AAPL) iOS. In a press conference held here in advance of the Mobile World Congress 2014 trade show, Microsoft executives said the Nokia deal would not change how the company works with partners. It also emphasized that Microsoft has a long history of successfully working with hardware partners.
The inclusion of LG is notable. In April 2012 LG decided to focus on Android as its primary smartphone platform after having initially supported Windows Phone. The addition of ZTE is also interesting because ZTE has in the past made several Windows Phones but used Android as its main smartphone operating system.
But perhaps the most notable addition is Lenovo, which is on its way to becoming the third largest smartphone maker in the world. Microsoft is also clearly focusing on markets such as China and India by adding Foxconn, Karbonn, Lava and other smaller players.
Indeed, Microsoft said that with the latest announcement the company is now working with seven of the top 10 smartphone makers in the world, in addition to major brands in China, India and Taiwan. The partners now represent more than 56 percent of the world's smartphone shipments, according to research firm IDC. Microsoft said the new partners will release "an even broader array of devices, from iconic to lower-cost options," as well as phablet devices.
Nick Parker, corporate vice president of the OEM division at Microsoft, said that before Microsoft was working with a small group of OEMs for Windows Phone and was largely invested in making them successful by building their portfolios. However, Nokia made more than 75 percent to 80 percent of the Windows Phones sold last year. Parker said he expected that to change in 2014 with a broader range of OEMs and targeted geographies and markets. "Now it's very much up to that whole ecosystem to grow together," he said.
While Windows Phone is growing, it still faces a major challenge in market share. According to ABI Research, total global Windows Phone shipments in fourth quarter 2013 grew 19 percent sequentially and 104 percent year-over-year, though the OS still only garnered 4 percent market share.
Microsoft's Joe Belfiore, vice president of Windows Phone program management and design, said that in 2013 the company focused on expanding Windows Phone sales volumes, getting wider developer and application support and just simply getting phones into the hands of customers to create a virtuous cycle of support.
Further, Microsoft said it is adding support for Qualcomm (NASDAQ:QCOM) Snapdragon 200 and 400 and 400 LTE chips, with support for networks running LTE (both TD-LTE and FDD-LTE), HSPA+, EV-DO and TD-SCMA. The 200 and 400 series chips will support low-end and mid-range smartphones. Microsoft will let handset vendors use soft keys (not physical hardware keys on the front of the phone) and add support for dual-SIM capabilities, which should help in Asian markets, where Android is especially strong
Additionally, Microsoft launched the Windows Hardware Partner Portal, which is designed to speed up device commercialization while also cutting development costs. The aim is to make Windows Phone more competitive in high-volume, mass market device segment.
Belfiore also said this spring Microsoft will release a major software update, Windows Phone 8.1. As The Verge notes, he said the company will "technically" support all existing Windows Phone 8 devices with the update.
- see this release
-see this Windows blog post
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