Can Microsoft beat Android at its own game?

The Windows Phone strategy seems to be free or cheap. Well, it worked for Android.

Microsoft may be going back to its old bag of tricks with Windows Phone 8; if it can't buy the market, it'll give the product away until everyone uses it. Hey, it worked for Android.

A few weeks back, Gizmodo published a harsh-but-true blog post that said Android is ubiquitous not because it's a great OS but because it's free, noting that a lot of the no-contract or pay-as-you-go phones are all Android. They are also older BlackBerry models, but the point is taken.

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BlackBerry tried to win consumers and failed and is now desperately trying to hold on to its business users. Apple pursues people with disposable income. Always has. That leaves a whole lot of the market left for Android, which it is happily lapping up.

However, it doesn't incur loyalty. iPhone users are loyal to a fault. They make German Shepherds look like cats. BlackBerry's user base is also rather loyal. They have to be to have stuck with them this long (except for those who have no choice). But Android? The only Android loyalty I see is among gearheads who like the openness and flexibility Android allows.

After that, how loyal are fans to something cheap or free? Not very, I would think, and the signs are there.

Kantar Worldpanel noted last November that Windows Phone was making serious inroads on the iPhone. Because Europe's smartphone penetration had surpassed 50%, consumer demand was shifting toward cheaper phones, and iPhones are exorbitant without a carrier subsidy (something they don't do in Europe). In Italy alone, WP8 had hit 11.8% market share.

Now we're starting to see evidence of WP taking market share from Android in the U.K. Kantar Worldpanel's latest ComTech report states that Windows Phone market share grew 240% year-over-year, from 2.4% in January 2012 to 6% this past January.

And a lot of that came at the expense of Android. While 26% switched from Symbian, 17% were Android defectors. Only 6% switched from RIM and just 2% left iOS. The rest - 47% - were first-time smartphone buyers.

Nokia just introduced two new phones, the Lumia 720 and 520, with the latter aimed at emerging markets, which are not subsidized like in the U.S., and ZTE and HTC are also in the game. The fact is there will always be a bigger market for the Toyota Corolla than for Ferrari. It makes sense to pursue the larger market. And if there is one thing Microsoft knows, it's giving away a product to grab market share. Just ask Netscape.

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