Microsoft asks HTC to ship its Android smartphones with Windows Phone baked in

A new report from Bloomberg claims that Microsoft is currently in talks with HTC to add Windows Phone as a dual-boot OS to its Android smartphones.

HTC just posted its first-ever quarterly loss and is in need of a huge turnaround if it expects to continue in the smartphone world. The company was once the leader in smartphone innovation, having started out as an OEM and building mobile devices for Palm and HP, to name a few. HTC set out to move from behind the curtain and into the spotlight with its own-branded handsets and it quickly became a major player in the smartphone market.

HTC was very successful building multiple Windows Mobile smartphones and it soon caught the attention of Google, who was getting ready to launch Android. Google chose HTC to build the first Android smartphone, the T-Mobile G1, in 2008. The company was now selling handsets running Windows Mobile and Android but became very dependent on Android when Microsoft announced it was building a new smartphone operating system to better compete with Apple, Google, and BlackBerry. Microsoft's move would force HTC to focus solely on Android as Windows Phone 7 was under development.

Microsoft shipped Windows Phone 7 in 2010 and faced an uphill battle in trying to regain the market share it lost during the transition from Windows Mobile to Windows Phone 7. It got support from Samsung, HTC, and Nokia, who all licensed the new OS and built smartphones running on it. The company is now in a distant third spot behind Apple and Google and has just purchased Nokia's device division in a bid to release its own smartphones and increase Windows Phone's market share.

Microsoft is also reportedly now urging HTC to ship its Android smartphones with Windows Phone baked inside, in exchange for reduced or free Windows Phone licenses. HTC already pays Microsoft around $5 for every Android smartphone it builds due to a patent licensing deal and between $15 and $35 for every Windows Phone it builds.

It is believed that Microsoft is pitching the idea of dual-booting HTC smartphones that would allow users to choose which OS they want their handset to run. As far-fetched as it sounds, HTC has been working on a dual-boot smartphone with the HTC One. It currently sells the Android handset with its skinned version of Android and also sells the smartphone through Google with a stock version of Android. The company recently announced that it was looking into a way to allow users to boot between the two flavors of Android, so a dual-booting Android and Windows Phone is definitely a possibility.

As expected, Microsoft and HTC are now playing the "no comment" game when asked about the deal, so we'll have to wait to see if anything comes out of these talks. We'll be sure to keep you updated.

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