Microsoft makes it official: We're all in with Android

Any doubt that Microsoft sees Android as an important part of its future should be erased with a just-announced deal with an Indian handset maker to manufacture dual-boot Windows-Android phones, and with Microsoft asking HTC to include Windows Phone as a dual-boot option on its Android phones. That's on top of Nokia's new line of low-cost Windows Phone devices. Is this a way to extend Windows Phone's life, or an admission of the platform's failure?

The Verge, citing the Times of India, reports that India-based Karbonn Mobile has signed a licensing agreement with Microsoft to make and sell Windows Phone handsets -- and to allow them to be dual-boot Windows Phone-Android devices. The dual-boot phones will be available in approximately six months.

Karbonn Chairman Sudhir Hasija told the Times of India:

"Microsoft has eased the regulations and is opening up its platform for other players."

Hasija said that Windows Phone-only handsets will launch in about three months. Dual boot devices will follow about three months after that.

The deal is part of an emerging Microsoft strategy to embrace Android rather than try and bury it, which given Android's world-wide dominance would be an impossible task in any event. Reuters reports that that Microsoft last month asked HTC to include Windows Phone on its Android smartphones. Microsoft wants the deal so badly, according to Reuters, that Terry Myerson, head of Microsoft’s operating systems unit, "discussed cutting or eliminating the license fee to make the idea more attractive," to HTC.

All this is on top of the bombshell that Nokia is releasing a low-cost line of Android phones, targeted at emerging markets. Those devices are really Windroid phones rather than purely Android phones, because their interfaces will look like Windows Phone, and they will carry Microsoft services rather than those from Google, including Outlook.com rather than Gmail, Bing rather than Google search, OneDrive rather than Google Drive, and Nokia's Here maps rather than Google Maps. Apps also won't be able to be downloaded from Google Play, but rather via Nokia app's store.

Is this newfound embrace of Android a way to extend Windows Phone's life or even go in an entirely new mobile direction, or is it covering up for Windows Phone's failure? A bit of both, really. Reuters says that one reason Microsoft is trying to get HTC to include Windows Phone on its Android line is that HTC has given up on Windows Phone, and won't manufacture any new phones based on it. In addition, Windows Phone sales have recently stagnated, maxing out at 10 percent in the largest European countries, and with a market share of only 5.1% in the U.S. and a dismal 0.7% in China, according to Kantar Worldpanel ComTech. That makes it seem as if Microsoft's embrace of Android is a desperate move.

But it really is more than that, a new openness by Microsoft and a recognition that what's most important in mobile isn't necessarily the operating system itself, but rather the services the operating system delivers. So in Nokia's Windroid mashup, Microsoft wins because Microsoft gets revenue from users from the phone's underlying Microsoft services. And the Windroid phone is also a kind of on-ramp for people in the developing world to Window Phone. Once they're hooked on Microsoft services and used to the Windows Phone interface, the thinking goes, they'll be more likely to buy a Windows Phone when they move up the economic ladder.

Similarly, in the deal with Karbonn, Microsoft clearly hopes that people will be more likely to use Windows Phone if it's alsl included with Android. So whether Microsoft's recent moves are a recognition of failure or not, they're clever ideas, and a way to use Android to further the company's mobile goals.

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