Report: Microsoft to waive Windows Phone license fees for Indian vendors

Microsoft (NASDAQ:MSFT) will waive license fees for its Windows Phone software for two Indian handset vendors, Karbonn and Lava, according to a Times of India report. The report, which cited unnamed sources, made clear that Microsoft was pursuing the move to bolster its market share in the fast-growing Indian market.

As the The Verge notes, Microsoft currently charges OEMs a license fee to use Windows Phone, and that charge is thought to be between $5 and $15 per handset. At Mobile World Congress, Microsoft announced a raft of new Windows Phone partners, including ones that are strong in China and India, where Microsoft is looking to steal market share from phones running Google's (NASDAQ:GOOG) Android with lower-cost Windows Phones.

Microsoft's new partners include Foxconn, Gionee, Lava, Lenovo, LG Electronics, Longcheer, JSR, Karbonn and ZTE, expanding beyond previous supporters that included Nokia (NYSE:NOK), Samsung Electronics, HTC and Huawei. Microsoft is nearing completion of its $7.5 billion deal for Nokia's handset business.

The report said the agreements with the two Indian firms are specific to them. A Microsoft spokeswoman told FierceWireless that the company "cannot discuss confidential licensing terms." The report said Microsoft refused to comment on the specifics of the talks the company held with the Indian companies, but a spokesperson told the newspaper: "We have extensive programs to help our partners build great devices. Our licensing model allows us to partner with OEMs across the world."

This is not the first time rumors have cropped up of Microsoft making Windows Phone free (as Android is). A December report from The Verge, which also cited unnamed sources, said that Microsoft was considering making its Windows Phone and Windows RT software available free of charge to hardware vendors. The report said that the plans were not final but were being seriously considered by Microsoft Executive Vice President Terry Myerson, the head of Microsoft's converged operating system division.

In October, Bloomberg reported that Myerson and Microsoft petitioned handset maker HTC to support Windows Phone as a second option on devices already powered by Android. That report, which also cited unnamed sources, said Myerson discussed reducing or even eliminating Windows Phone licensing fees to make the pitch more attractive to HTC executives.

Microsoft has said it is adding support for Qualcomm (NASDAQ:QCOM) Snapdragon 200 and 400 and 400 LTE chips, which will power more low-end and mid-range smartphones. The phones will likely come to market after Microsoft debuts Windows Phone 8.1 in April at its Build developer conference. 

According to ABI Research, total global Windows Phone shipments in the fourth quarter of 2013 grew 19 percent sequentially and 104 percent year-over-year, though the OS still only garnered 4 percent global market share.

For more:
- see this Times of India article
- see this The Verge article
- see this ZDNet article

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