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Microsoft Corporation (MSFT) Needs Android OEM Help With Long-Term Strategy

Microsoft Corporation (NASDAQ:MSFT)

Microsoft Corporation missed a huge opportunity in mobile when the likes of Alphabet’s Google and Apple Inc. were busy building operating systems for mobile devices.

Microsoft paid dearly for that as Apple’s iOS controlled a 42.9% market share in the in the U.S. while Google-backed Android OS had a 53.4% market share at the end of 2015. In contrast, Microsoft had a mere 2.9% market share with its Windows Mobile OS to barely beat BlackBerry’s 1.2% market share in the space. In addition, Apple’s iPhones and Google-backed Android phone are in firm control in smartphone sales as they control 42.9% and 46.9% market share of total subscribers in the U.S.

Microsoft Corporation (NASDAQ:MSFT)

Now, Microsoft under the leadership of Satya Nadella the company is making smart moves to get it back into the mobile game. The firm has written down the loss on its ill-fated Nokia acquisition. The firm has launched a new line of Windows phones; it is working on a new mobile OS (Windows 10 Mobile), and it is creating universal apps that can work on smartphones, tablets, and PCs. Now, Microsoft is reaching out to Android as a launch pad to advance its mobile push.

Microsoft seeks help from Android

In a blog post published on Wednesday, Nick Parker, CVP, OEM Division at Microsoft wrote about the strides that the firm has made in getting Microsoft’ Services out on Android devices through agreements with device partners. Parker says, “in a mobile-first, cloud-first world, it’s mobility of the experiences that matter to people” and that the firm is working towards ensuring that its services are available to mobile users irrespective of whether they use Windows Mobile or not.

The firm has made strategic agreements to provide Microsoft apps and services on mobile devices as it partners with OEMs to pre-install Microsoft apps on their Android phones and tablets. In his words, “I’m excited to announce that there are now 74 hardware partners in 25 countries who are making Microsoft productivity applications and services available on their Android tablets and phones.”

He noted that Android devices are now “pre-installed with Word, Excel, PowerPoint, Outlook, OneNote, OneDrive and Skype. Office and Microsoft services are available on a wide variety of Android devices today, such as the LG G Pad 2, Samsung Galaxy S6, Sony Xperia Z4 and many other tablets and phones offered by our partners.”

Microsoft is playing a long game with mobile

It remains to be seen though if Microsoft won’t have quality control issues on the performance of its apps across the devices from different OEMs. Nonetheless, it is obvious that Microsoft is playing a long-term game strategically in its push to bring Microsoft apps to android. To start with, Microsoft will most likely generate some revenue from the licensing of its apps to OEMs on the Android ecosystem even though there was no mention of such an arrangement.

Secondly, getting Microsoft apps to the Android OS will introduce Android users to the quality of Microsoft apps over similar Android Apps. Lastly, Microsoft might be able to get a number of Android users to consider switching to Windows Mobile in order to enjoy the full suite of Microsoft’s products – the firm will find it particularly easy to attract Android users who have PCs than Android users who have Macs.

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Victor Alagbe is a seasoned business and finance writer with a specialty in writing about how to invest for the long-term in healthcare, pharmacology, energy and tech stocks. His long-term focus is on stocks that provide a nice mix of growth and income. For the short term, he passionately writes about trading stock options for the excitement and leverage that stock options offer.