Microsoft continues to collect from Android vendors, Samsung is next


Right after Taiwanese ODM manufacturer Wistron, maker of Chrome netbooks for Acer, agrees to pay Microsoft a royalty for a pool of patents, it looks like Samsung is next. According to Reuters Samsung is in negotiations with Microsoft for a fee between $10~15 a device. HTC had already agreed on a license fee back in 2010 so it seems like Microsoft is taking this step by step.
Barnes and Noble have already decided to go to court with Microsoft and it looks like the beginning of a string of similar cases.

Android has been growing more than 200% a year now and at the same time dwarfing other operating systems like Windows Phone. Microsoft had been pouring money for a long time in mobile O/S and after 15 years of investment it looks like 2 year old Android will get the best of them. Is Microsoft trying to make Android grind to a halt? It probably won’t be able to put a dent to the current trend and Android doesn’t seem to infringe on any critical patents from Microsoft. Oracle’s Java (acquired from Sun) infringement case seems much more significant.

What will happen however is that Microsoft will force OEMs to use its Windows Phone 7 alongside Android. The current companies on Microsoft’s list overlap with the potential Windows Phone 7 licensee list. So if linked with Windows Phone usage this could be an effective strategy to secure the list of licensees before they all run away to seemingly free Android or Chrome in the case of Wistron.

The royalty will probably not even reach $10, the assumed amount from last year’s HTC case. It will probably be in the range of $3~7 and possibly further discounted if Windows Phone devices or Windows 7 devices are manufactured. Barnes and Noble is a case where Microsoft had no hope of licensing its O/S so probably demanded cash. This would have triggered the lawsuit, different from the silent agreements between Microsoft and HTC, Wistron, etc.

Microsoft is definitely in an uncomfortable position looking for all the maneuvers it can make. It does show that Android is not completely free but it won’t stop the incoming tide of future Android devices. Because Android is probably cheaper than Windows Phone anyway and also than the effort needed to develop anyone’s own operating system.

Windows Phone 7

Tom is an expert in the telecoms industry with 14 years of experience. He provides practical advice for the short term goals of clients as well as insights for long term vision. Previously he was a celebrated world renowned analyst at Strategy Analytics. He first introduced value share and profit share. He also created the Smartphone Strategies service and headed the research growing it to become the largest service in the company. Tom also worked for LG Electronics within the Mobile Communications Company in various roles.

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