Microsoft to cut Windows Phone licensing fees by 70% to target low-end Androids

Microsoft is reportedly said to soon cut down on the licensing fee for its Windows Phone by up to 70 percent in a bid to target the low-end of the smartphone market and compete with budget Androids.

Sources have said once Microsoft takes control of Nokia's hardware division, a licensing fee cut is imminent, as the company aims to compete with Android devices.

According to Tech Crunch, the intended purpose of the price cut is to make it possible for OEMs to build affordable Microsoft hardware that can compete with its budget Android devices.

OEM smartphone maker Infosonics, which deals in low-cost Android devices, said that the price drop was coming.

Earlier it was reported that Microsoft was looking at getting rid of the licensing fee altogether, but since the software giant still makes a good portion of its revenue from licensing its desktop OS, it is likely unwilling to cede that stream entirely.

The report said that the licensing fees for Windows Phone were between $20 and $30 as of the last word from a hardware partner, and a 70 percent cut would put new fees at roughly between $6  and $10 per unit.

The software firm has already lined up some low-cost manufacturing partners, including manufacturers in China and India, for getting its software in the hands of entry-level consumers, the report added.