To Compete, Microsoft May Need to Drop Windows 7 Smartphone Prices

Microsoft Corp. (MSFT) may need to either drop the price of its Windows 7-based smartphones or develop a cheaper version of the handset in order to gain sufficient market share in the rapidly growing Android-platform market, InformationWeek reported, citing a Gartner analyst.

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Microsoft and partners Samsung and LG Electronics next month will start selling Windows 7-based phones for about $200, the publication said, citing a blog post from Gartner's Carolina Milanesi. Microsoft, which holds about 4.7% of the global mobile operating-system market, will see that share fall to about 3.9% over the next four years, Milanesi wrote.

At issue is market share of the rapidly growing sales of smartphones based on Google Inc.'s (GOOG) Android platform. Android smartphones will be used by more than 250 million people worldwide in 2014, up from less than 7 million people last year, research firm Gartner said in a report last month.

Microsoft could gain share by dropping its prices or unveiling a cheaper version of its smartphones, according to InformationWeek. Samsung sells one phone for $60 for those who start an AT&T Inc. (T) carrier subscription, while Apple Inc. (APPL) sells its iPhone 3GS for $99 to new AT&T customers.