Rumor Mill: Microsoft urging HTC to support Windows Phone on Android devices

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Microsoft (NASDAQ:MSFT) is petitioning handset maker HTC to support its Windows Phone mobile operating system as a second option on devices already powered by Google's (NASDAQ:GOOG) Android, Bloomberg reports.

Sources with knowledge of the matter said that Windows Phone Corporate Vice President Terry Myerson has discussed reducing or even eliminating Windows Phone licensing fees to make the pitch more attractive to HTC executives. The talks are preliminary and no decision has been made, two insiders added. The technical details are also murky, and it's unknown whether HTC phones would run Windows Phone and Android at the same time, or let users select their default OS.

A Microsoft spokesperson declined to comment. HTC did not respond to a request for comment.

While Taiwan-based HTC has supported both Android and Windows Phone, the manufacturer has not unveiled a new Windows Phone device since June 2013 and no additional releases are planned, a source revealed. HTC has struggled to remain competitive in the mobile device market as rivals like Samsung Electronics have gained momentum: HTC shares have lost close to 90 percent of their value since April 2011, when the company was second only to Apple (NASDAQ:AAPL) in U.S. smartphone sales. According to ABI Research, HTC was the world's 12th largest handset maker in the second quarter.

Indeed, HTC reported its first-ever quarterly loss, of $120 million, according to Reuters. The results stand in stark contrast to Samsung, which is predicting better-than-expected quarterly earnings.

In August, The Wall Street Journal reported HTC is also developing its own custom mobile operating system targeting the massive Chinese consumer market, complete with deep integration with popular Chinese apps including the Twitter-like microblogging service Weibo. Insiders said HTC is currently testing smartphones running the software and prototypes are in the hands of Chinese officials, with a commercial launch expected by the end of 2013.

Microsoft has also struggled to gain a foothold in the hyper-competitive mobile segment. Windows Phone currently makes up just 3.9 percent of the global smartphone market and is expected to climb to only 10.2 percent by 2017. Last month, Microsoft reached an agreement to purchase Nokia's (NYSE:NOK) mobile phones business and a license to its patents and mapping software for $7.2 billion, a move that promises to give Microsoft the flexibility to accelerate the development of Windows Phone-powered devices, allowing the company to compete more effectively against Apple and Google, which in 2011 acquired Motorola's mobile phone business for around $12.5 billion. Android and Apple's iOS together account for an estimated 93 percent of worldwide smartphone sales.

For more:
- see this Reuters article
- see this NYT article
- read this Bloomberg article

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