Microsoft will open Windows to developers

Giving operating system away a move to counter Google success

Microsoft Vice President Joe Belfiore holds up a phone using the new Windows 8.1 operating system during the keynote address of the Build Conference Wednesday in San Francisco. Microsoft kicked off its annual conference for software developers with updates and new features for Windows Phone and Xbox.

SAN FRANCISCO — Microsoft Corp. will give away its Windows operating system to makers of smart phones and small tablets for consumers as it seeks to make more of an impact on those fast-growing markets and counter the massive success of Google Inc.’s free Android platform.

Microsoft’s move, announced at its annual developers conference in San Francisco, is an attempt to broaden the small user base of mobile versions of Windows, in the hope that more customers will end up using Microsoft’s money-making, cloud-based services such as Skype and Office.

Up to now, Microsoft has charged phone and tablet makers between $5 and $15 per device to use its Windows system, as it has done successfully at higher prices for many years with Windows on personal computers. Hardware makers factor the cost of that into the sale price of each device.

That model has been obliterated in the past few years by the fast adoption of Google’s Android system for phones and tablets, which hardware makers quickly embraced and accounted for more than 75 percent of all smart phones sold last year. Apple Inc.’s iPhone and iPad account for most of the rest of the mobile computing market.

By contrast, Windows-powered phones held only 3 percent of the global smart-phone market last year. Windows tablets have only about 2 percent of the tablet market, according to tech research firm Gartner.

Microsoft’s move to make Windows free for some consumer devices bucks a central tenet of company co-founder Bill Gates’ original philosophy, that software should be paid for, which led to Microsoft’s massive financial success over the past four decades. But analysts said it is a realistic reaction to the runaway success of free Android.

“Microsoft is facing challenges on the mobile and tablet fronts and need to change their strategy to move the growth needle, this is a good and logical first step,” Daniel Ives, an analyst at FBR Capital Markets, said.

Windows will be free for companies making phones and tablets with screen sizes under nine inches for the consumer market. A license fee will still apply for business devices.

Also at the gathering, Microsoft formally announced it has developed a voice-activated phone assistant feature called Cortana, a direct rival to Apple’s Siri.

The feature has been rumored for some months. A test version was demonstrated at the event by Joe Belfiore, a Microsoft executive.

Cortana is named after an artificial-intelligence character in the company’s “Halo” video games. Cortana tries to be chatty like Siri on Apple’s iPhones and iPads, while anticipating information you might want, like Google Now on Android devices.

Cortana, which can take verbal instructions to search the Web, set alarms, make calls, and a host of other actions, is still in testing but will soon be standard on Windows phones, Mr. Belfiore said.

Cortana is among the new features coming to a Windows Phone update called 8.1. The updated operating system will come with new phones in about a month, including three new ones that Nokia announced Wednesday.

Microsoft is also updating its Windows 8.1 system for tablets, laptops, and desktops. Although Microsoft has been pushing touch-screen controls, the new update is designed to make it easier for those with traditional keyboard and mouse controls. The update, simply called Windows 8.1 Update, will be available starting Tuesday.