And on the tablet side, with how they were incentivizing, there wasn't much money there either." With Nokia becoming part of the business, that was going to go away. "The money was very minimal, and most of that was coming from Nokia. "On the phone side, Microsoft wasn't really revenue," Milanesi said. However, there's little immediate financial risk, said Milanesi, who noted that Microsoft was actually putting small amounts on the bottom line from Windows licensing to smartphone and tablet ODMs and OEMs. It also marked Microsoft's flat-out admission that it could not make money in using its decades-old business model of selling licenses to OEMs (original equipment manufacturers) and ODMs (original device manufacturers), but had to hunt for a new revenue generator, which it has described as "devices and services." "It's what they needed to do in a market where they are competing with Android." "This was absolutely key if they wanted to make any difference in mobile," said Milanesi. Microsoft has adopted a strategy strikingly similar to that of its arch rival, which essentially gives away its Android mobile operating system, a key reason why Android now powers the majority of new devices shipped each month. "This helps level the playing field," said Gillen, referring to Windows and Google's Android. "Microsoft has very low mindshare in phones and tablets and no mindshare in wearables, so the free operating system, simply put, was a requirement." "While I don't see this as a last-ditch effort to get traction with Windows in the mobile market, it's getting closer," Moorhead contended.
was in line with earlier moves, including the lowering of system requirements to fit on less-expensive hardware with minimal amounts of system memory and storage space, as well as reports last month that the company was slashing licensing prices for some devices by 70%. The freeing of Windows on smaller devices - although small is relative, since many smartphones boast screens of around 5-in.
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