Microsoft in talks with HTC to add Windows to Android phones at little or no cost
Microsoft Said to Ask HTC to Put Windows on More Phones — Microsoft Corp. is talking to HTC about adding its Windows operating system to HTC's Android-based smartphones at little or no cost …
Context & Ripple Effects
The economics of this rumored deal invert Microsoft's own playbook. Back in 2011 the company was reported to have earned five times more income from Android than from Windows Phone, built on the per-device patent licensing it had pitched since warning about Android's 'hidden costs' in 2010. Now, according to Bloomberg's unconfirmed report, it is offering HTC Windows essentially free — trading that royalty stream for shelf space.
HTC's side of the table is documented, not rumored: the company has just confirmed its first-ever quarterly loss of $101M on $1.6B in revenue, after having weighed its own software strategy as far back as 2010. That makes a no-cost second OS an attractive hedge against total dependence on Android. The story travelled widely on pickup from Engadget, The Verge, The Next Web and 9to5Google, reflecting how directly it cuts against Microsoft's established licensing model.
First-order effects
- HTC gains a path to dual-OS phones at negligible marginal cost, addressing its confirmed first quarterly loss by differentiating hardware without new licensing spend.
- Microsoft would be cannibalizing its own Android royalty income — the very stream that had out-earned Windows Phone — in exchange for device volume on an OS struggling for OEM commitments.
Second-order effects
- Other Android licensees paying Microsoft per-device fees gain immediate leverage to demand the same free-Windows terms, compressing a revenue line Microsoft has relied on since 2010.
- Google faces OEMs shipping a Google-free or dual-boot Windows experience on Android hardware, weakening the default distribution advantage that underpins Android's search and services position.
Third-order effects
- If free-or-cheap Windows becomes standing policy rather than a one-off HTC negotiation, smartphone OS competition shifts decisively from per-unit licensing economics to ecosystem-scale plays — services, search defaults and cloud attach — a structure Google already operates in and Apple never depended on.
- For a Windows hardware-software stack where Microsoft is reportedly the last seller of an RT-based tablet and Surface variants remain in flux, phone OEM support becomes the difference between a viable three-horse mobile market and a two-platform one.
The trend: Mobile operating systems are moving from licensed products priced per device to freely distributed platforms that monetize through services and ecosystem lock-in, with Microsoft's reported HTC offer as the clearest signal yet that even the staunchest licensing holdout is capitulating.