ZTE, a Chinese smartphone manufacturer has revealed the exact licensing amount it paid to Microsoft to get a Windows Phone OS license for its newly launched ‘Tania’ Windows Phone. It is a budget-friendly device and could well bring Microsoft’s mobile operating system to an all new level in the market with the competitive pricing. However, the reduction in a Windows Phone price comes at a challenging cost for the manufacturer.
Santiago Sierra, Portfolio Manager for ZTE UK spoke at Tania’s UK launch, highlighting the fact that the high cost of obtaining a Windows Phone license leads to higher pricing for its Windows Phones, as compared to ZTE’s Android devices. ZTE is also the first company to actually spell out the license amount, while other manufacturers have remained quiet about it.
It is widely assumed that OEMs pay roughly $10-$15 per handset for a Windows Phone license, while ZTE actually paid $23-$31 per handset for the same license to Microsoft. The popularity of Android owing to lower prices is also because Android is free for OEMs to install on their devices, significantly lowering the price of the device in the market. But even with this, many Android manufacturers are still paying huge sums to Microsoft and others for patent licensing, complicating the “free vs. paid-for” argument.
ZTE however, is not one of the big players in the Windows Phone market yet, and it could well be that it is paying more for the license because of this fact. The larger manufacturers pay lesser for a OS license. Those OEMs that sell handsets in larger quantities and need Windows Phone licenses in greater volume would naturally get them at a discounted price from Microsoft, roughly meaning that any other player such as HTC or Samsung would be paying a lot less than ZTE for the licenses.