Microsoft Said to Ask HTC for Windows on Android Phones (as a secondary OS)

Microsoft Corp. is talking to HTC Corp. (2498) about adding its Windows operating system to HTC’s Android-based smartphones at little or no cost, people with knowledge of the matter said, evidence of the software maker’s struggle to gain ground in the mobile market.

Terry Myerson, head of Microsoft’s operating systems unit, asked HTC last month to load Windows Phone as a second option on handsets with Google Inc. (GOOG)’s rival software, said the people, who asked not to be identified because the talks are private. Myerson discussed cutting or eliminating the license fee to make the idea more attractive, the people said. The talks are preliminary and no decision has been made, two people said.

Its willingness to add Windows as a second operating system underscores the lengths to which Microsoft will go to get manufacturers to carry its software. HTC, the first company to make both Windows and Android phones, hasn’t unveiled a new Windows-based handset since June and has no current plans to release any more, said one person. Microsoft, with 3.7 percent of the market, is finding it necessary to make concessions after agreeing to acquire Nokia Oyj (NOK1V)’s handset unit, which competes with other smartphone makers.
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The technical details have yet to be ironed out. It wasn’t clear whether an HTC phone would run Windows and Android at the same time, or let users choose a default.

Tony Imperati, a spokesman for Microsoft, declined to comment. HTC didn’t respond to a request for comment.

Microsoft’s $7.2 billion takeover of Nokia’s handset business is part of an effort to ensure the availability of phones with its software and help boost demand for the devices.

Microsoft charges handset makers a license fee for every Windows Phone sold, and also has agreements in place to collect royalties for devices that use Android as part of patent settlements. By contrast, makers of Android devices don’t pay Google, and instead agree to preinstall the Mountain View, California-based company’s services such as search and maps on Android-based phones.
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Windows held a 3.7 percent share of the smartphone operating system market in the second quarter, according to research-firm IDC. Android dominated with 79 percent, while Apple Inc. (AAPL)’s iOS was No. 2 with a 13 percent share.

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