Microsoft to stick with licensing fees for Windows Mobile

OSLO (Reuters) - Microsoft MSFT.O plans to continue charging licensing fees from handset makers for using its mobile operating system and not follow the free offerings of Google and Nokia, Chief Executive Steve Ballmer said on Tuesday.

Willcom Inc's W-Zero3 handset is demonstrated for a photograph during an unveiling in Tokyo June 7, 2007. The phone is equipped with Microsoft's Windows Mobile 6 Classic. REUTERS/Yuriko Nakao

The pressure on Microsoft's high licensing fees has increased over 2008 with Google GOOG.O rolling out free Android technology and Nokia NOK1V.HE offering to buy out others from Symbian and also make its software royalty-free.

“We do,” Ballmer told Reuters, when asked whether his firm would stick with licensing fees. “We are doing well, we believe in the value of what we are doing.”

“It’s interesting to ask why would Google or Nokia, Google in particular, why would they invest a lot of money and try to do a really good job if they make no money. I think most operators and telecom companies are skeptical about Google,” he said.

Google tries to promote web surfing on phones and the use of their services such as e-mail and search so they make advertising revenue.

“In the case of Nokia - are they really open sourcing, or are they really making Symbian their own operating system? We have to wait and see,” Ballmer said in an interview.

Microsoft’s market share in smart phone operating systems has stayed at about 10 percent for several years, despite the U.S. technology giant’s efforts to win more.

Microsoft charges $8 to $15 per phone, according to Strategy Analytics.

“Handset makers are skeptical of Nokia, operators are skeptical of Google, I think by actually charging money people know exactly what our motivations are,” Ballmer said.

He said there was no reason to expect Microsoft to enter the mobile phone making business, like some analysts foresee.

“I do not anticipate us building a phone. Sorry, we are not going build one,” Ballmer said. (Reporting by Tarmo Virki; editing by Jon Loades-Carter)