Microsoft Says Free Windows Has Helped Woo 50 New Phone and Tablet Makers
Microsoft said it has attracted a number of new partners since offering Windows free for devices with screens smaller than nine inches. — Windows chief Terry Myerson said Tuesday that 50 new companies …
Context & Ripple Effects
This announcement caps an eighteen-month retreat from Windows licensing fees on small screens: in February 2014 Microsoft cut what it charges manufacturers to install Windows on low-cost devices from $50 to $15, and by Tuesday Windows chief Terry Myerson said that going fully free for screens under nine inches had brought in 50 new phone and tablet makers. The pickup was widely covered, syndicated across outlets including Gigaom, FierceWireless and Neowin.
The stakes are familiar ones for Microsoft's device business: back in August 2010 the company spent more than half a billion dollars to jump-start Windows Phone 7, and partner recruitment at Computex in June 2014 leaned on the same small-tablet push. The difference now is that the lever is price rather than subsidy — Microsoft is giving the OS away where Android already costs nothing.
First-order effects
- Fifty new phone and tablet makers gain a zero-license-cost alternative to Android for small-screen devices, lowering their barrier to shipping Windows hardware.
- Microsoft gives up whatever per-device license revenue it still collected on sub-nine-inch screens, betting that volume and services attachment replace the fee.
Second-order effects
- Hardware makers weighing Android against free Windows now have two no-upfront-cost OS options at the small end, pressuring Google to defend its distribution advantages through services rather than licensing terms.
- Larger-device pricing becomes the anomaly: with small screens free, the remaining Windows license fees on bigger tablets and PCs face pressure to follow, squeezing the OEM economics Microsoft has long relied on.
Third-order effects
- If the pattern holds, Windows shifts structurally from a per-copy licensed product to freely distributed software monetized through services and cloud attach — the direction the Windows 10 preview and Insider Program Microsoft rolled out this week already gesture toward.
- OEM relationships consolidate around whichever platform funds itself without license revenue, reshaping the PC-era business model that made Microsoft's Windows division profitable.
The trend: Microsoft is dismantling its per-copy Windows licensing model device by device, trading license revenue for ecosystem reach as mobile hardware commoditizes.