Lower-Cost Models, Skype for Windows Phone

An OS update targeting lower-cost smartphones and availability of a Skype application beta were Microsoft’s main Windows Phone announcements at the Mobile World Congress event in Barcelona, Spain, in Feb. 2012. The OS update, sometimes referred to by the code name Tango, will be available on upcoming Windows Phone models with reduced hardware specifications and lower price points, which could increase Microsoft’s share in emerging markets. The Skype beta is the first Windows Phone support for the recently acquired voice and video communication service. The announcements come as Windows Phone struggles to gain a significant share of the smartphone market.

Windows Phone Update Targets Low End

The next significant update to the Windows Phone OS is designed to support phone models with lower performance processors and less RAM (256MB, rather than the currently required 384MB). These phones have retail prices that are 30% to 50% lower than typical current Windows Phone models, which cost around US$500 without a carrier contract. The cost difference could make Windows Phone appealing to customers in emerging markets, such as China, where smartphone market leaders Google (with Android) and Apple (with iPhone) have not yet established market dominance as they have in other parts of the world. Microsoft believes these new markets could expand the potential customer base of Windows Phone by 60%. However, low-cost competing phones, such as some Android models with more capable hardware, have already begun arriving in these markets.