The Verge is reporting that Microsoft is considering making Windows RT and Windows Phone free for OEMs, to combat Android.
We understand that any decision to axe the license fees for Windows Phone and Windows RT would be backed by a push for revenue from Microsoft’s apps and services. Microsoft has been experimenting with ads in Windows 8 apps, and any associated revenue from those apps and the company’s built-in Bing search results would help offset the lack of license fees. Microsoft would also push consumers to subscribe to services like SkyDrive, Office, and Skype for additional revenue.
So, let me get this straight. In April this year, a Microsoft-sponsored antitrust complaint about Android had this to say:
Google’s predatory distribution of Android at below-cost makes it difficult for other providers of operating systems to recoup investments in competing with Google’s dominant mobile platform.
And we have the whole Scroogled campaign (I felt dirty just for visiting that site).
And now they’re considering doing the exact same things they claim Google is doing unfairly? Does this company have any internal consistency whatsoever?
This once again proves what they have been saying. Its difficult to compete with Google unless one gives the product for free and recoup the costs via intrusive ads.
Edited 2013-12-11 13:56 UTC
Seems to me some people will pay a premium to avoid the Google ads. I mean if what you say were true, then iPhone wouldn’t be as financially successful as it is right now.
Except that iPhone does not result in avoiding Google or ads. Google’s services are probably the most popular services on iPhone.
That’s not why. iPhone has the whole iTunes ecosystem behind it and, in the states at least, iTunes is the largest online distributor of content. Music, Movies, TV episodes, you name it and iTunes probably has it. Even in the books department, where Apple lagged behind when iBooks first came out, they’re catching up. Google has Google Play but, let’s face it, their content library is nowhere near iTunes. Many iPhone users already had significant investment in the iTunes ecosystem before hand (via iPods usually) and those who didn’t most likely do now after using iOS for a while. I’d say avoiding ads, while a part of it for some, is a significantly less reason on the whole than their investment in the ecosystem and the sheer convenience (as long as you use Apple devices at least) of iTunes content.
Something I’ve noticed among friends with iOS devices and friends with Android devices: iOS users seem to be bothered less about the cost of a media purchase via iTunes, and are generally happy about the plethora of titles to choose from. Android users generally seem to be against buying a movie or TV episode from Play, and don’t care about the availability of specific titles since they tend to get media under the table, so to speak.
I’m not saying that’s true across the board, obviously, but in my tiny niche of society it seems to be the norm.
Edited 2013-12-11 18:15 UTC
I don’t buy stuff on Play usually. I mean, why would I?
I have Netflix and Amazon Prime for movies and TV series, which covers most of what I want to watch.
I read a lot of e-books which I prefer to get without DRM but Kindle is my fallback. There is a Kindle app for everything and the actual Kindle hardware is decent too.
The only thing I buy from the Google store is the apps, mostly games.
And in my circle of friends I notice that iOS users are no less of freeloaders than Android users. I guess anecdotal evidence is just that – anecdotal.
A number of surveys have looked in to this and it is indeed a general trend that iOS users spend more (and not just on iOS/Apple stuff).
I don’t think it’s because these people like to spend money, but more because they have more money anyway than the average Android user.
When you have a lot of money it makes it easier to spend it I guess.
But what is also a factor, I think, is that a lof of Android users use their phone as a feature phone. They don’t even get to the pay button. And why should they, if their needs are so limited.
That last part is key. If they want to put out a ‘free’ product and actually make money off it, there’s always some features they have to leave out, even if it benefits end users, because it doesn’t serve their bottom line. They’d also have to throw in some anti-features, regardless of whether it pisses off their users or not. Why do you think services like Facebook suck so much? There’s a reason why my FB news feed randomly switches from ‘Most Recent’ to ‘Top Stories’, no matter how many times I set it. And you know it’s not a bug either – you wouldn’t see that kind of nonsense if it were a paid service.
Some people say that if we got rid of all the ads and bullshit, most of the ‘free’ internet would go away. To that, I say good riddance. Whatever is left, if it’s of high enough value, I would be happy to pay for it.
Well said worknman
Even though they could recoup the costs from sales and licenses of other products such as Windows and Microsoft Office to compensate for Windows Phone. And they supposedly have billions in cash reserves.
How are Google’s ads intrusive?
“First they ignore you, then they laugh at you, then they fight you, …. then you win.”
Mahatma Gandhi
They have nothing to lose, never had.
“….And we have the whole Scroogled campaign (I felt dirty just for visiting that site).
Oh please… Microsoft and Google both suck donkey. You mean to tell me you think Eric Schmidt really “does no evil”?
Google makes better products but they have little to no moral compass. Give me a break.
No, I do not mean to tell you that.
I generally feel dirty if I go to Google or Bing these days, and simply stick to DuckDuckGo everywhere. They are the way search engines should be.
They even kindly ask, if you’re using an adblocker, to white list them for a tiny bit of revenue. Personally I’d rather reply to that by giving them some sort of donation and keeping the ads out of my Internet experience.
I’d dirty not only if I’d use google or bing, but if I’d use DuckDuckGo, too. I distrust DDG as much as I distrust google.
I’d rather use startpage.com
[OFFTOPIC] Thom, don’t you ever read your mails ? [/OFFTOPIC]
Kochise
Considering Schmidt is no longer leading the direction of the company I fail to see why what he does matters.
They’re actually quite consistent: they’re out to make money, no matter how. They’ve just been not very good at it since they had to face some actual competition.
True this. Its a bit naive to think that a company actually believes its own advertising, marketing and public statements. They believe what ever will make them the most profit ( not that being profit focused is a bad thing for a companies senior management).
… that I’m sure we’re all familiar with:
“If you can’t beat ’em, join ’em.”
As much as I don’t care one whit for microsoft (and as much as I similarly no longer care one whit for google) – I don’t see this particular bit of behavior as a sign of gross hypocrisy on MS’s part.
( There’s another saying, which I tend to prefer: “If you can’t convince ’em, confuse ’em!” )
Cheers
You wouldn’t happened to have worked as an IT consultant at some point by any chance?
I’m adopting that as my new mantra.
Hopefully, it will be enough gas to power the funderlings over the next profit peak, before the gravity of low expectations suffocates their entrepreneurial flame.
There was this interview in June with the Huawei CEO, who complained about the license cost:
http://www.ft.com/cms/s/2/ced47926-d80f-11e2-b4a4-00144feab7de.html
Now Microsoft competes directly with the other WP OEMs, but they are so small in sales that MS has not much to lose from making WP free.
Keep in mind that Android is not really free-of-cost for OEMs, because of junk-patent litigation from MS (at least the ridiculous vfat patent is dead now).
If Microsoft indeed has plans to offer WP and Windows RT for free, Google really needs to provide protection from junk-patent litigation (like red-hat does) to OEMs, or at least to those OEMs that ship Android devices with Google services (Play Store, Maps etc).
My biggest complaint with Windows Phone is Bing. I use the rest of Microsoft’s services (Google’s, also), but Bing is a lousy search engine, and I always have a hard time finding good pages in their results.
I really, really like Windows Phone otherwise, but since search is the feature I use most, I think my next phone will be running Android instead.
It is like verytime with Microsoft, when they want to conquer a new market (“new” for Microsoft).
1. They sell licenses of its software with high price.
2. If nobody wants it, they sell it for a normal price.
3. If still nobody wants it, they sell it for a low price.
4. If again nobody wants it, they give it for free (free as in “free beer”, not as in “free speach”).
5. If still nobody wants it, they spend hardware and software for school and universities.
But they given’t it away for free as in “free speach”, like Google doing it with Android.
And if enough people are bound to the product (vender lock-in & Co) they raise the price.
They want to get all money back, they have spend for that with interest and compound interest.
So be warned: It is only a trap.
Edited 2013-12-11 18:54 UTC
“And now they’re considering doing the exact same things they claim Google is doing unfairly? Does this company have any internal consistency whatsoever?”
MS is right about Google’s predatory business model, but MS is big enough to afford to fight Google on their own ground. This is however not true for smaller actors, whether it is in the mobile OS marker or any market covered by Google’s free services.
I would like to see Apple selling mobile ads for free through iAd in order to show Google how it is to compete against a free service in your core market. I don’t think it will happen, but as Apple recently brought iWork to everybody for free as an attempt to weaken MS Office business , I think it would be an interesting move
majipoor,
“MS is right about Google’s predatory business model, but MS is big enough to afford to fight Google on their own ground. This is however not true for smaller actors, whether it is in the mobile OS marker or any market covered by Google’s free services.”
I think MS were right. I also think Thom was right in pointing out the hypocrisy if this were to play out.
Regardless, it’s good to have more competition. A monopoly in anything (be it operating systems, search, mobile devices, telephone companies, cable companies, etc) always leads to worse service, higher costs, and (self evidently) fewer choices.
Microsoft may not be happy about sharing the market with others, but this is good for consumers because MS is going to have to try a lot harder to please us.
Edited 2013-12-11 20:20 UTC
But they were trying to get onto HTC’s Android phones as a second OS back in October (when HTC said they weren’t going to offer any new WP handsets.)
http://www.taipeitimes.com/News/biz/archives/2013/10/05/2003573724
http://gadgets.ndtv.com/mobiles/news/microsoft-to-offer-windows-pho…
http://blogs.computerworld.com/windows-phone/22925/does-microsofts-…
http://www.bloomberg.com/news/2013-10-04/microsoft-said-to-ask-htc-…
Wasn’t it hardware that was supposed to become [essentially] free and people would only pay for the OS? Who predicted that?
Microsoft was founded on the principal that making software was the way to make a successful business in the new PC markets. The Microsoft empire was built on an ecosystem where almost all the value flowed into software. Microsoft still makes most of its profits from selling software licenses of one sort or another, even if a lot are labelled as services. if it is true that Microsoft is going to start to offer free OS software then that is surely a true inflection point, the moment when the software giant said there is no future in selling software, or at least there is no big revenue/profit in software licenses anymore.
If they go down this road how long can Office command significant licenses fees?
I wonder what their business model for the future will be?
Devices, like Apple, and Services, like Google. Copycat-style. Both failed horrible so far. That’s why Ballmer got gone and the replacement needs to do better else bye, bye.
Point is this is the first time that Microsoft needs to adjust. Monopoly gone, business model and strategy needs to change. Many big companys failed on that and became small and only a small amount of companys similar to Microsoft transition successful, ie IBM.
Microsoft is big, bigger and pure Windows-desktop-OS centric. That makes it harder to transition without much lose. Deep cuts ahead.
Edited 2013-12-11 21:58 UTC
cdude,
“Point is this is the first time that Microsoft needs to adjust. Monopoly gone, business model and strategy needs to change.”
I think most of their power came from exploiting their monopoly, they could just control defacto standards by exercising power as a monopoly to neuter the market viability of competitors. That is until antitrust started to be more seriously enforced against microsoft to end their old practices. MS still retains a great deal of power but now that it’s a different game they seem to be lacking a competitive strategy in new markets. I think the reason Balmer failed is because he was too used to taking success for granted.
Anti-trust didn’t had any larger impacts. Microsoft monopoly on the desktop is still present as of today. It is that customers move away from desktop to smart-devices and there, in this new market, Microsoft plays no role. Microsoft is caught on desktop like the desktop is caught by Microsoft. And while we moved, past since its done and now only accelerating, from the desktop-era to the smart-era we moved away from the Microsoft monopoly.
Its even more worse, for Microsoft, since not only is there monopoly gone but they failed, past and decided, to gain anything in that new era. From monopoly to irrelevancy with a ~3% market share rounding error.
Writing Microsoft off goes to far. They may do better in future then they did in past to gain some more percent market share. But gaining back monopoly is, as of today, impossible. What is Microsoft and its products worth without that monopoly? Did we got the answer with WP, RT and Surface already? Is it that bad?
Edited 2013-12-12 15:13 UTC
cdude,
“Anti-trust didn’t had any larger impacts. Microsoft monopoly on the desktop is still present as of today. It is that customers move away from desktop to smart-devices and there, in this new market, Microsoft plays no role.”
I won’t deny that the regulators often do too little and much too late to help the victims that brought about the antitrust suits in the US and EU. However it’s still had impact. Now that MS knows they cannot fly under the radar, the mere risk of antitrust action is helpful in preventing more abuse. When I think of antitrust benefits, I factor this in too, though I realize that some may not.
It’s difficult to factually know what would happen in the absence of antitrust regulation; that’s inherently speculative. However as an example, without risk of antitrust action, MS might have proceeded to force manufacturers to lock down secure boot code on x86 desktops exclusively to MS operating systems – just like they did with ARM devices, which would have devastated alt-os on x86 in the long term.
“Writing Microsoft off goes to far…”
I don’t really write them off, however I think they were assuming that they could command a lead like on the desktop just because they were microsoft. I still give them a far better chance at success than than a typical startup would because they have such large accounts to bankroll their operations. Never the less, it’s terribly inefficient to spend all this money and not have a good strategy. From your previous posts I think you and I are in agreement here.
As I said all along, (don’t know if someone got this idea first), that Microsoft needs to offer their OSes free, no more license restriction, if they want to be still relevant in the near future. Their profit must be for value added services on top of their Windows Operating System(desktop/mobile) and technical support. If they still insist on selling Windows Professional for $159(OEM), and the FPP version which is I think 300% higher than the OEM version, then, to my opinion, their is no future for their OS.
allanregistos,
“Microsoft needs to offer their OSes free, no more license restriction, if they want to be still relevant in the near future. Their profit must be for value added services on top of their Windows Operating System(desktop/mobile) and technical support.”
This is very similar to the linux commercial economic model, is it not? Don’t sell the OS, sell the services… To be honest, I don’t think there would be enough consumer service & support money to keep a company the size of microsoft afloat. Many consumers today wouldn’t ever pay for support and already expect most services to be free, if not from MS then they’ll head over to google or facebook or somewhere else to use their free windows OS and free services.
The most obvious alternative is to fund the OS and services through ads. In some parts of the tech world, the transition to ad-supported business models is already happening, but I question whether this is really all that good for consumers.
Technology devices may become as aggregating to use as american TV programming is to watch. Not only is 40% of air time buggered by commercials, but some channels have the audacity to overlay animated ads at the bottom of the screen on top of the show you wanted to watch for several seconds into the show. Many stations are turning the volume up for all the ads and turning it back down for the show, I guess they figured out that people were getting up and doing something else instead of watching the ads. On demand cable TV services specifically block fast forwarding through television commercials. All this on top of the fact that it’s not even free since we still pay for both the service and equipment anyways. The future of advertising on computers will get a lot more annoying & frustrating as the ad technology gets shoved more deeply into core technologies like the OS.
Luckily, this is getting regulated in the EU …wasn’t there also some effort in the US?
Edited 2013-12-15 08:10 UTC
zima,
“Luckily, this is getting regulated in the EU …wasn’t there also some effort in the US?”
http://pittsburgh.cbslocal.com/2012/12/13/law-goes-into-effect-to-r…
How about that, I had no idea. I could have sworn I still noticed it this past week but I guess I’ll have to pay more attention next time to be positive. I wonder if they try to match the commercials with normal programming volume or if they merely compress all audio into low dynamic range filters to give everything the same overall intensity.
“A new computer in the KDKA-TV master control room monitors and logs all sound levels and before the audio leaves the station, it runs through software and special compressions equipment to keep the sound within FCC specifications.”
The way I interpret this quote, it sounds like the later, meaning normal programs will loose high dynamic range audio in order to maintain a constant volume with the ads. Maybe they have a signal to tell them not to alter the normal program’s audio?
Who cares about consistency? They are giving it away for free. Finally competing instead of complaining. This is a good thing.
Sure. They are consistent in greed and monopolistic urges. But when faced with real competition, they have to give them up.
Edited 2013-12-12 00:42 UTC
…Fire with Fire. Windows Phone has a lot of potential and if manufacturers can use it for free then it will be offered.
So the reason it’s not selling is because consumers are protecting manufacturers from having to pay MSFT a license fee?
Are you doing economic analysis here or comedy?
“Does this company have any internal consistency whatsoever?”
Sure they do, they just think we all have short memories, they are worse than the ambulance chasing lawyers.
I hope they are successful to a point, because monoculture is terrible, but I think at this point it’s clear that the market does not give a fuck about Windows Phone.
Nokia did relatively well because of consumer brand loyalty, but that’s going away once the mobile division is purchased.
But when is enough enough? As a Windows Phone owner, the lack of meaningful updates make the platform seem dead. It’s like they don’t even care about it at Microsoft, and at the same time the OS still has a loooong catch-up to do in usability and stability.
So, even if the OS is free, the platform is still unattractive and broken. To make it worse, the latest update drove the battery life and the notification system in some apps (such as Whatsapp and Skype) broke (stops notifying of messages after some days and the phone must be restarted to fix it).
I mean, even Whatsapp complains that the OS is broken and asks for a OS restart to work properly (I’m not making this up):
http://www.wpcentral.com/whatsapp-now-tells-you-when-your-push-noti…
So, before making the OS free, it would be good if they fix it first.
reminds of the stunt beos pulled where they gave up and tried to give away the os for free. didn’t make any difference at that time. conditions are a bit different this time around.
Well, quite obvious.
Did you forget that, in a few months, Microsoft will become a handset maker by taking over Nokia ?
Who would BUY Windows Phone/RT knowing that it will directly fund Microsoft to be a competitor for his own devices ?
Yet I think Microsoft should provide more incentives for RT users, i.e., every RT users gets the autographed picture of Steve Ballmer doing Monkey dance in gorilla suit.
nah, a classic autographed photo of steve doing what steve does best: throwing chairs.