Tags: Microsoft | Global | Internet | Phone

Microsoft Targets Global Internet Growth With Cheaper Phones

Sunday, 23 February 2014 03:25 PM

Microsoft Corp. is accelerating its push into mobile software, adding new hardware manufacturers and joining forces with chipmaker Qualcomm Inc. to develop cheaper smartphones aimed at markets such as China.

Microsoft and Qualcomm are working on a low-cost phone design that developers and handset makers can use to build their own devices, Joe Belfiore, a Microsoft vice president, said at the Mobile World Congress in Barcelona Sunday. New partners to make Windows smartphones include China’s Lenovo Group Ltd.

Trailing Apple Inc. and Google Inc. in higher-end devices, Microsoft is now trying to build market share for its Windows operating system from the bottom up. Cheaper smartphones mean consumers in less-developed countries will have a chance to use the Internet for the first time, a fast-growing market that’s also attracting rivals such as Google, maker of the Android operating system.

“Microsoft can be more healthy by widening our ecosystem,” Belfiore said in an interview. “We care a ton about emerging markets.”

Microsoft and Qualcomm are designing a basic core of a phone with the necessary processors and wireless chips that developers can start with as they design Windows phones for emerging markets. Microsoft also plans to update its Windows 8.1 software and Windows Phone software this spring, helping it target lower-priced devices, Belfiore said.

Nadella’s Challenge

Microsoft’s push to broaden the reach of its mobile ecosystem comes as Satya Nadella takes over as chief executive officer from Steve Ballmer and the Redmond, Washington-based company prepares to complete the $7.2 billion takeover of Nokia Oyj’s handset business. Nokia is planning to announce an expansion into lower-end Android smartphones at the Mobile World Congress, people familiar with the matter said this month.

Microsoft’s effort to get more handset makers to offer Windows phones has so far failed to shake the dominance of Apple’s iOS and Google’s Android, which account for 96 percent of the smartphone market. Of the more than 1 billion smartphones shipped in 2013, only 3.3 percent ran Windows, according to market-research firm IDC. Eighty-nine percent of the Windows phones sold were made by Nokia, said IDC.

Microsoft said Sunday that nine manufacturers, including Lenovo, ZTE Corp. and LG Electronics Inc., plan to add Windows Phone devices to their offering. Samsung Electronics Co., HTC Corp. and Huawei Technologies Co. also make Windows phones.

Global Internet

This is only the latest attempt by Microsoft to spread Windows to more corners of the world. Last year, operating systems chief Terry Myerson floated the idea of free or low-cost Windows software to smartphone makers like HTC, people with knowledge of the matter said at the time.

The last revolution in mobile communications happened when the smartphone was born more than a decade ago, and the explosion of cheaper Internet-enabled smartphones for developing markets will be the next milestone, said Yves Maitre, head of devices at Orange SA, the French wireless carrier which has expanded into markets such as Egypt, Poland and Kenya.

At the Mobile World Congress, other companies are also announcing lower-end devices. Mozilla Corp., developer of the Firefox browser, unveiled a $25 phone prototype.

“The story of Internet-for-everyone will be written at MWC this year,” Maitre said.

Nokia’s Android

Nokia, whose mobile-phone business will soon be part of Microsoft, has used Windows in higher-end smartphones since 2011, while relying on its own software in cheaper phones aimed at emerging markets. The company has lost share in the low end as Android smartphones costing $100 or less have gained users.

When asked about Nokia’s plan to add Android devices, Belfiore said there are things with Nokia that Microsoft is excited about and things it isn’t. He declined to comment further.

Microsoft isn’t planning to build a long-term strategy around Android devices, a person familiar with the matter said this month. Rather it may be planning to use the Nokia Android phones to bolster its sales in the lower end until it can produce Windows phones for that market segment, the person said.

Microsoft agreed to buy Nokia’s handset business in September. The companies have said they expect to complete the deal this quarter.

© Copyright 2018 Bloomberg News. All rights reserved.

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Microsoft Corp. is accelerating its push into mobile software, adding new hardware manufacturers and joining forces with chipmaker Qualcomm Inc. to develop cheaper smartphones aimed at markets such as China.
Sunday, 23 February 2014 03:25 PM
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