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Microsoft tries to compete with Google and Apple

In addition to the launch of new Windows Phone devices, including the flagship Lumia 930, Microsoft Corp. (MSFT) had two other big pieces of news on Tuesday at the BUILD conference.
 
First, new Microsoft CEO Satya Nadella announced that Microsoft would be following in Google Inc.'s (GOOG) footsteps, offering Windows for free to tablet and smartphone OEMs.  
 
This was surely a difficult decision, one that Microsoft's last CEO, Steve Ballmer, was unable to make.  But Microsoft had already in recent years drastically trimmed its smartphone and tablet licensing rates, given that it was spending a lot of money to make these products and almost no one was buying or using them.  Prior to this week's announcement, Microsoft was reportedly charging between $5 USD and $15 USD per tablet (Windows RT) or smartphone (Windows Phone) license.

Lumia 630

Gartner, Inc. (IT) estimates that today only 3 percent of smartphones and 2 percent of tablets run Windows.  Microsoft is currently in third place in each market.
 
But going free could change that.  
 
Mr. Nadella, who rose up at Microsoft as a cloud computing star, indicated that the cloud will be a key part of Microsoft's strategy going forward.  He states:

We are going to innovate with a challenger mindset. We are not coming at this as some incumbent trying to do the next version of Windows, we are going to come at this by innovating in every dimension.

Our vision, simply put, is to thrive in this world of mobile first, cloud first.  Our goal is to really build platforms, create the best end-user experiences, the best developer opportunities and IT infrastructure for this ubiquitous computing world.
 

Key components of that cloud strategy include natural language processing and cloud storage.  Microsoft announced the personal assistant Cortana at BUILD, which is currently in beta.  Significantly smarter than Apple, Inc.'s (AAPL) current model Siri assistant, Cortana's advanced abilities to understand rather abstract queries heavily leverages Microsoft's cloud computing prowess.  Likewise Microsoft's recently announced OneDrive is gunning for Google Inc.'s (GOOG) Google Drive and other storage services like Box.
 
Microsoft is rumored to be considering an ad-supported free version of PC (laptop, desktop, hybrids) Windows to OEMs as well.

Source: Reuters





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