Microsoft's big plan to dominate Android and win mobile is coming together

Satya NadellaChinaFotoPress via Getty ImagesMicrosoft CEO Satya Nadella.

Microsoft has signed up over 70 smartphone manufacturers to pre-install its services onto phones, up from 20 in May last year.  

In a blog post announcing the milestone, Nick Parker, the man in charge of relationships with smartphone makers, wrote that “Microsoft has been working hard to win over the hearts and minds of our partners and customers” which has culminated in 74 original equipment manufacturers (OEMs) signing up. 

The partners, which include Acer, LG, Samsung, and Sony, will ship Word, Excel, PowerPoint, Outlook, OneNote, OneDrive, and Skype on devices starting soon.

Essentially, Microsoft will have its most important products on millions of phones. 

This is an important move for the company because it means that the failure of Windows Phone matters less and it aligns with CEO Satya Nadella’s vision for how Microsoft will function in the future. 

Nadella told BuzzFeed that devices are now “nodes” and individual sales do not matter if other people support Microsoft’s services. 

“If you think of this more like a graph,” he said, “these [devices] are all nodes. Sometimes the user will use all of these devices … sometimes they will use only one or two of our devices and some other platforms — so be it.” 

Windows Phones have shipped just 110 million handsets in their entire lifetime while Apple’s iOS and Google’s Android have shipped 4.5 billion units. 

This is a problem for Microsoft as, by and large, it’s easiest to get people to use a product if you can just bundle it on a phone. Apple Maps, which is the default app on iPhone, is beating Google Maps for precisely this reason

“[Bundling Office on smartphones] is a cornerstone of our broad services strategy, to bring an array of Microsoft services to every person on every device,” writes Parker.

Microsoft is, according to Parker, incentivising its partners with “opportunities to realise new revenue streams.” However, he does not elaborate on where these will come from. 

For Microsoft, the incentives are likely a small price to pay. 

The company announced that around 340 million people are using Office on iOS and Android devices in the three months leading up to January, while a further 900 million are using Skype in total. 

Microsoft now charges users for a subscription to Office, called Office 365, which totals around $90 (£62) a year. The company is also giving away Windows 10 for free, rather than charging customers for a licence per copy. 

This strategy, which is set to expire in July (unless the company chooses to extend it), is a big change for Microsoft and requires a shift in strategy. 

However, analysts are positive about the new Microsoft

Pacific Crest released a research note following Microsoft’s earnings that described the company as “a safe haven in an uncertain market” while Goldman Sachs reiterated its opinion that the company is successfully negotiating a turnaround.

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