Backup Plan: Microsoft Set To Make $70 Million Investment In Cyanogen

Windows Phone hasn’t exactly been a shining success for Microsoft. In a smartphone market dominated by smartphones running Google’s Android and Apple’s iOS, Microsoft has been left to pickup the table scraps along with fallen star BlackBerry. Yes, Microsoft reported record Lumia sales for its most recent quarter, but those sales were made up primarily of budget-minded smartphones like the Lumia 520, which have been available for as low as $20 in recent months.

With this in mind, Microsoft has a couple of avenues to pursue in order to ensure that its mobile platform and its services spread throughout the smartphone sector. We have already discussed the first avenue: Windows 10. Windows 10 aims to make Microsoft’s smartphone OS a more credible competitor to Android and iOS with innovative new features, a revised user interface, and universal apps. If Microsoft can boost its market share by its own volition through a better product, that means more people using Microsoft’s services which is always a nice bonus.

The second avenue is a bit more interesting, and is definitely not something that we were expecting. The Wall Street Journal is reporting that Microsoft is eyeing an investment in Cyanogen, which builds a custom version of Google’s Android operating system. According to the WSJ’s sources, Microsoft would become a minority investor on the company, providing around $70 million in financing.

And with Microsoft throwing millions of dollars at Cyanogen, it could also work to push its services into the operating system. Imagine Cyanogen with Microsoft services loaded by default including Bing Search, OneDrive, Skype, Outlook, and Office 365. This wouldn’t be an unprecedented move, as a tightly intertwined Android/Microsoft mash-up was previously created with Nokia X smartphones. However, Microsoft killed Nokia X smartphones when it completed its acquisition of Nokia’s Devices and Services division.

It’s a move that might actually work according to some analysts. “Cyanogen may have a greater chance than Microsoft to build a third ecosystem for mobile,” says Rajeev Chand, managing director at investment bank Rutberg & Co.

Representatives for Cyanogen and Microsoft have declined to comment on this latest report.