Manufacturers reportedly ignoring Windows Phone due to OS fees... and Nokia

When Microsoft announced Windows Phone 8 - a year ago, almost to the day - it revealed that four manufacturers would create the launch handsets for the again-rebooted platform: Nokia, Samsung, HTC and Huawei. All four have since launched devices, but 12 months on, that list of manufacturers still hasn't grown. 

Since Windows Phone 7 launched back in 2010, Microsoft has seen interest among its largest OEM partners dwindle. LG and Dell, which were among the WP7 launch manufacturers, have since abandoned the platform, while ZTE's last Windows Phone launched with version 7.5 of the OS. Asus, which created a pre-launch developer device for the platform, came close to selling its E600 Windows Phone, but eventually ditched those plans. 

Interest in Windows Phone among manufacturers is waning, and Digitimes - citing its ever-faithful and always anonymous "Taiwan-based supply chain makers" - claims that there are two major factors to this situation. These unnamed sources claim that "Microsoft's unwillingness to lower WP8 licensing charge rates" is a significant issue for manufacturers, who have been seduced by the absence of such charges in using Google's Android.

While Android indirectly attracts additional costs through patent licensing, it also offers greater opportunities for customisation and differentiation compared with the more rigid and restricted Windows Phone OS. Microsoft has reportedly reduced its licensing fees for Windows RT on smaller tablets, following numerous reports of low consumer and OEM interest in the platform; if the Digitimes report is to be believed, it seems that Microsoft is resisting calls from manufacturers to do the same for Windows Phone. 

But a second factor is also identified: Nokia. With Windows Phone now holding just 3.2% of the global smartphone market - and Nokia representing 70% of total Windows Phone sales - Nokia is the biggest fish in a very small pond. The prospect of competing with that kind of dominance in the ecosystem isn't one that appeals to other manufacturers, especially when there appears to be relatively modest interest in the platform among smartphone buyers. 

ZTE and Asus were reportedly considering launching Windows Phone 8 handsets this year, but have delayed or cancelled those plans. The same is said of Acer, and that much at least has already been corroborated by an Acer vice president as we reported earlier today; the company executive stated: "We think Windows Phone 8 is a great OS... but I think no-one knows about it." He added: "We've made the decision not to launch a Windows Phone 8 device this year. Next year, depending on how we see the growth go this year, we may well do."

Asus stated last year that it would build a Windows Phone "at the right time", but with platform growth believed to be well below expectations, it's unlikely that we'll be seeing one any time soon. 

For now, it looks like the platform is stuck with just the same four OEMs - but that's not the end of the world. Next month, Nokia is expected to launch its EOS flagship with a 41MP camera, while Huawei has teased a new waterproof Windows Phone that's due to launch later this month. Even without more manufacturers, it seems there's still plenty to get excited about on the Windows Phone front.

Source: Digitimes | via IntoMobile

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45 Comments

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I like how the manufacturers aren't allowed to modify the OS, customize it or put uninstallable applications on it. The only device specific stuff that are found are drivers and firmware.

I'm happy with my Lumia 920. I can remove any app I want. No need to use badly supported 3rd party app just to gain root access.
All apps that aren't key components of basic phone functionality should be possible to remove with just a few touches.
I hate Android (Google) for allowing manufacturers to install anything they want and remove the possibility to uninstall apps. Fitness and Walkmate ****. I want a phone, not some fitness bull****.

"Nokia is the biggest fish in a very small pond."

oh that's too kind. how about, "a whale in a contraceptive water balloon."

Well I bet their patent protection license with MS would certainly drop if they put effort into WP.
That alone would save money, then they would realize that the OEM has less to do with making a WP than an Android at the same time, justifying the OS / Office license fee.

The licensing problem can't be true. It costs Android manufacturer more to pay for all the licensing fees, MS alone gets $10 per handset sold and there are many other fees from other patent holders. I read a while ago that the licensing fees for every Android handset sold is north of $30, or more than a WP8 license.

Consumers are also ignoring Windows Phone...which may be the number one reason why no manufacturers want on board

I'm not ignoring it. My only issue is if they want to grab peoples attention they have to bring something new to the masses. Currently they have done nothing other than make another iPhone clone. The one thing I like about the WP is they haven't gone overboard with the number of customisation you can do with the phone. Sometimes the Android is overwhelming and just too much. However if they opened up certain features such as allowing custom keyboards etc it would instantly grab my attention.
Also MS own the desktop world, why the hell haven't they made seamless integration between WP8 and Windows 8?

I call BULL on the Nokia reference. I just upgraded from an HTC WP7 (Trophy) to an HTC WP8 (8X). The Lumia devices are clunky pieces of crap compared to the polish of the 8X -- it has practically the same features as the HTC's, yet is both larger AND bulkier. It feels like a brick.

Now, I don't love HTC... but when it comes to WP8 devices, Nokia is miles away from being "there". HTC and Samsung, however, are much closer (and HTC closer than Samsung).

its seems WP takes place of classic Apple Computer during the mid 80s to early 90s,
and with similar attitudes of its fanboys too.

I think Manufactures are stuck in the Android mindset. Microsoft is strict about their terms and hardware so the OS won't be fragmented. HTC seems to have abandoned WP and gone back to Android which is sad since the 8x was a promising phone. Having Nokia as the dominant backer of WP is just like having Samsung as the dominant force behind Android right now.

While Android indirectly attracts additional costs through patent licensing, it also offers greater opportunities for customisation and differentiation compared with the more rigid and restricted Windows Phone OS.

So basically OEM's want to ram crapware down the end users throats like they can with Android? no thanks! sorry but even as a non-Windows Phone 8 user I still want to see a viable alternative that actually benefits end users rather than just lining the pockets of big OEM's who do a half-assed job when it comes to making a product.

Why even charge for the OS? Everyone knows the real money maker in mobile is the content stores. Well I guess everyone but Microsoft.

If they got rid of the fee for the OS, then I can't see how that would be bad. That would potentially mean more manufactures, which would bring more (and maybe even better) phones, and more users, and obviously more revenue from the store than could ever be made from just charging for the OS itself.

Because they don't make their own phones. Google charges to license their apps (Gmail, etc), which is effectively the same thing. As a very distant third horse in the race, they do not have the marketplace to justify giving the OS away for free anytime soon.

Considering that I cannot name four worthwhile Android manufacturers (Samsung, HTC, and LG in descending order with LG likely about to leapfrog HTC).

SharpGreen said,
Why even charge for the OS? Everyone knows the real money maker in mobile is the content stores. Well I guess everyone but Microsoft.

No.

Apple makes its money from hardware. The App Store is a nice side business, but it accounts for about 5% of net income. The rest comes from hardware sales.

Google makes its money from mobile searches and mobile ads. Android has a lower attach rate than iOS, and an even lower paid attach rate.

Considering the general quality of phones is incredibly low, I do not see this as a bad thing. On Android, the only smartphone I would ever consider buying would be whatever the latest Nexus phone is. For Windows Phone, I do not even consider HTC due to terrible quality control issues plus frequently inaccurate GPS issues, and I have zero respect for Samsung due to the incredibly cheap feel of their phones that does not match their full price (not to mention I had 3 DOA Samsung Focus phones in a row). With Apple, I do feel like I get quality, but they're the only player in that game, obviously.

MDboyz said,
Why should we need other manufactures while we have Nokia ...

Because competition is always good for customers...

No need. If there is only Nokia for WP, they still will try to do better to compete with Android and iOS.

Fritzly said,

Because competition is always good for customers...

You obviously don't know anything about business nor innovation. This is actually a good thing since if they had more manufacturers, we'd get even slower updates, crappier hardware, and they'd lose a lot of money in managing each one. It's better they have a select few quality ones, which they do, which has proven them to be the fastest growing phone OS... so really this is not hurting them nor the market at all.

j2006 said,
You obviously don't know anything about business nor innovation. This is actually a good thing since if they had more manufacturers, we'd get even slower updates, crappier hardware, and they'd lose a lot of money in managing each one. It's better they have a select few quality ones, which they do, which has proven them to be the fastest growing phone OS... so really this is not hurting them nor the market at all.

I do not think that MS would be the what it is if Windows and Office were available only for a single OEM. Unless MS wants to become a hardware manufacturer itself or using Nokia as a proxy. Said the latter scenario could be an interesting one...

j2006 said,
You obviously don't know anything about business nor innovation. This is actually a good thing since if they had more manufacturers, we'd get even slower updates, crappier hardware, and they'd lose a lot of money in managing each one. It's better they have a select few quality ones, which they do, which has proven them to be the fastest growing phone OS... so really this is not hurting them nor the market at all.

It depends how you look at it. From one side its not bad to focus on product instead of its expansion factor. But the problem is nokia has exclusive software such as navigation which prevents them adding those to other brands such as htc to succeed despite from the quality, hot look and people's desire to buy. This obviously hurts wp ecosystem and keeps market share low.

I think these companies are being rather short-sighted. Windows Phone has been growing, true it has been slow, but I venture to guess its on a big upswing. I finally picked up one. Even though I like the customization of Android, for my price/contract range, I couldn't get the newest OS. Now I have the Nokia 521 and while I'll miss a couple of things, overall it is the right move, and appears I am not alone judging by how much it is selling.

Why does multiple manufactures even matter? Apple as proven that if you produce a good device that appeals to the masses, you dont need multiple devices/manufactures. Even with Android, MS, and BB...Apple is still going strong. MS just has to figure out how to do this...if they can.

Microsoft is not a hardware company (at least historically, outside of mice/keyboards) while Apple has embraced a closed eco-system where they control the hardware and software and kick others out of its sandbox.

True, but MS can use their relationship with Nokia. And make their OS more appealing to others. Nokia already makes great devices and holds the most market share with WP8 devices. MS has also have proven that their OS can run smoothly on lower end hardware. So the only thing left really is their OS, features, support, app support...and whatever else.

techbeck said,
Why does multiple manufactures even matter? Apple as proven that if you produce a good device that appeals to the masses, you dont need multiple devices/manufactures. Even with Android, MS, and BB...Apple is still going strong. MS just has to figure out how to do this...if they can.
This man is smart^ Microsoft doesn't need to turn its phone into the mess that is Android. Concentrate on one manufacturer. Who cares about the initial low number of users. Hit a few home runs with Nokia and the customers will come. On the other hand, I believe Windows 8 bad rap is keeping potential customers from coming over. I never hear people complain about Windows Phone 8 or the Surface, but all hell breaks loose when you mention Windows 8.

techbeck said,
Why does multiple manufactures even matter? Apple as proven that if you produce a good device that appeals to the masses, you dont need multiple devices/manufactures. Even with Android, MS, and BB...Apple is still going strong. MS just has to figure out how to do this...if they can.

Because some companies such as Nokia are slow and don't produce the hardware that everyone wants. I think this is also due to Microsoft's slow as molasses speed that they're developing Windows Phone. I want a 5.5" phablet but no WP offers that yet.

JHBrown said,
This man is smart^ Microsoft doesn't need to turn its phone into the mess that is Android.

That is subjective and not what I said. Android was doing great even before all the cheapo devices. It has its place amongst a lot of people as well as Apple. MS just needs to find their place and figure things out. They have a great hardware manufactures behind them but something is missing. Once they find that missing component, they could do very well.

mrp04 said,

Because some companies such as Nokia are slow.

Nokia... slow? What planet are you on? Have you not seen the number of phones, updates, services, and apps they've released in the last few months alone?

j2006 said,

Nokia... slow? What planet are you on? Have you not seen the number of phones, updates, services, and apps they've released in the last few months alone?

They've released a few stupid apps that I couldn't care less about. The only Nokia app I care about is Drive and they made that available for all WP8 devices.

They've rehashed the 920 as the 925 and the 928. They've also released some other unimpressive phones. The 520/521 is the only notable thing since the 920 that they have done.

They're slow.

9 phones since about October of last year, numerous apps and updates to said phone and apps. Tell me which OEM has done anything close to those numbers in that time frame. You need to qualify your statement by saying Nokia isn't as fast as YOU think they should be.


You see. There is a difference there. This doesn't make them slow just because you're impatient. Not to mention slow and/or fast are both subjective. I'd say they're pretty quick myself. See how opinions work?

mrp04 said,

Because some companies such as Nokia are slow and don't produce the hardware that everyone wants. I think this is also due to Microsoft's slow as molasses speed that they're developing Windows Phone. I want a 5.5" phablet but no WP offers that yet.


Everyone? You've obviously never visited China. This is where "everyone" lives. And his brother.

No. Here in Asia we don't want the same as you. We're usually 5-10 years ahead of you (e.g. GSM, ringtones 3g, etc).

Major Plonquer said,

Everyone? You've obviously never visited China. This is where "everyone" lives. And his brother.

No. Here in Asia we don't want the same as you. We're usually 5-10 years ahead of you (e.g. GSM, ringtones 3g, etc).

hahaha

At least I don't have to worry TOO much about my Nokia stocks with crazies like you defending and buying their sub-par products. I bought the stocks because they were super cheap but they haven't gone up very much at all.

BTW, the EOS is basically looking like YET ANOTHER 920 but with a nicer camera. That's NOT ENOUGH, NOKIA! What will you call it? Lumia EOS 929?

Because y'know...the other manufacturers are making such strides with their latest clones of last years phones... -_-

Personally I don't see much point in doing refreshes faster than one per year anyway, because most people are on 2 year contracts anyway...

This isn't really an issue. Its better they have less manufactures to manage and test for each update. Its better they have a select few quality ones, or even better just one - Nokia or themselves so they have full control to innovate.