Microsoft Corporation (MSFT) recently signed agreements for Windows phone handsets with companies including China’s Foxconn, Lenovo, ZTE and Korea’s LG. This is good news for the company, which had many doubters, particularly when it took over Nokia for a hefty sum.
Handset makers have so far proved partial to the Android OS first developed by Google Inc. (GOOG), which they get more or less free of cost. But Microsoft’s Nokia phones have a relatively strong position in Asia, especially mindshare, so it might make sense to have a Windows phone especially for these markets.
Recently, at the Mobile World Congress in Barcelona, Microsoft announced a partnership with QUALCOMM Inc. (QCOM) to announce a reference design that could reduce the Windows phone’s time to market.. The reference design includes basic hardware, software and development tools.
Microsoft has also reworked its strategy for the computing market. In order to deal with competition from Apple Inc. (AAPL) and Google, which are eating into its core enterprise computing business, Microsoft has cut its Windows licensing fee. The reduction in fees is targeted at cheaper devices to induce manufacturers to use its OS. Microsoft’s OS is what most enterprises still use today, so if cheaper devices start incorporating it, corporate customers may be convinced not to move to a new platform.
Currently, Microsoft holds a Zacks Rank #3 (Hold).
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