The Times of India reports that Microsoft is giving away Windows Phone to two Indian phone manufacturers. The report starts by saying, "Desperate times call for desperate measures," and that's precisely the case. Apparently the deal was sealed prior to the Mobile World Congress last month in Barcelona, where Microsoft announced that Indian phone manufacturers XOLO, Lava, and Karbonn were adding Windows Phone to their arsenals. XOLO, it turns out, is a division of Lava.
Don't scoff at the Indian market. Some estimates put it at number 3 in the world. Last month, Gartner reported, "With a 166.8 percent increase in the fourth quarter of 2013, India exhibited the highest smartphone sales growth among the countries tracked by Gartner." Historically the market's been driven by low-cost Android phones, although the XOLO brand reaches higher. Now it seems Microsoft wants to muck about in the low end.
According to ChannelTimes, Samsung accounted for about 40 percent of India's smartphone market share in 2013, with Micromax at 16 percent, Karbonn at 10 percent, and Lava at 5 percent. They're all Android, all of the time. Last week, Karbonn announced it was going to ship a dual-boot Android and Windows Phone device in June. Now we know why -- or, at least, how.
According to several industry experts, Windows Phone now sets back manufacturers about $5 to $10 per handset sold. In late November, market analyst AdDuplex estimated that Nokia accounted for 90 percent of all Windows Phone 8 sales. With Nokia's devices business about to merge balance sheets with the Redmond behemoth, that 90 percent in (imaginary) dollars is about to disappear entirely. However you slice it, report it, or disguise it, Windows Phone revenue is about to hit zero anyway. Why not make some phone manufacturers happy -- and entice them to build Windows phones -- along the way?
No word yet on how much Microsoft will charge HTC for its new Windows Phone models. Last October, Bloomberg reported, "Microsoft is talking to HTC about adding its Windows operating system to HTC's Android-based smartphones at little or no cost." The folks privvy to the negotiations aren't talking.
Perhaps this is a new direction for the Devices and Services company in general. Giving away the razor is a time-honored marketing ploy, particularly when competitors' razors cost nothing. Zero-cost Windows Phone might even apply some downward price pressure on Windows itself.
This story, "Windows Phone is free in India -- and worth every penny for Microsoft," was originally published at InfoWorld.com. Get the first word on what the important tech news really means with the InfoWorld Tech Watch blog. For the latest developments in business technology news, follow InfoWorld.com on Twitter.