Microsoft collects royalties from over half of all Android devices sold

By on October 24, 2011, 2:00 PM

Microsoft has announced their tenth license agreement that provides patent coverage for Android mobile phones and tablets. The deal marks the ninth agreement for Microsoft in the past four months but more importantly, the announcement means that Microsoft is collecting licensing fees on more than 50 percent of all Android devices sold.

The latest agreement is with Compal, a Taiwan-based company that is one of the world’s largest Original Design Manufacturers. Compal makes smartphone and tablets for third parties, bringing in around $28 billion per year in revenue.

As Ars Technica points out, this means that one out of every two Android smartphones or tablets sold is licensing some sort of patent from Microsoft. Parties falling under this clause could include the vendor whose name is on the device or a manufacturer of a single hardware component inside the product.

Although there are no specific financial figures mentioned in the blog post, some believe that Microsoft is actually making more money from Android sales than they are from their own Windows Phone products. A report from earlier this year claims that mobile phone maker HTC pays Microsoft $5 for every handset they sell that runs Android.

Of course, Google isn’t too terribly happy about Microsoft’s patent claims. In regards to a patent agreement last month between Microsoft and Samsung, Google issued the following statement:

"This is the same tactic we've seen time and again from Microsoft. Failing to succeed in the smartphone market, they are resorting to legal measures to extort profit from others' achievements and hinder the pace of innovation."

According to the Seattle Times, Microsoft’s PR chief Frank Shaw replied to the statement via Twitter: "Let me boil down the Google statement ... from 48 words to 1: Waaaah."




User Comments: 13

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Wendig0 Wendig0, TechSpot Paladin, said:

This is the same tactic we've seen time and again from Microsoft. Failing to succeed in the smartphone market, they are resorting to legal measures to extort profit from others' achievements and hinder the pace of innovation.

I'd say that pretty much sums it up. I'd love to see Google go after them.

aj_the_kidd said:

"some believe that Microsoft is actually making more money from Android sales than they are from their own Windows Phone products"

This i could believe.

Even though this news annoys me, i would rather this than what Apple did to Samsung. At least MS is allowing the products to sell

Guest said:

Apparently, phones manufacturers could come up with some sort of scheme to release phones with some simplified, rudimentary OS that will work basic stuff (BADA maybe) without "infringing" any M$ patent, and then offer the free upgrade through external party, so M$ and other trolls wouldn't know how many are there actually released. Don't tell me the hardware on wave and galaxy is that different. ;-)

Guest said:

The things that the Android is infringing on is the ability for them to access SSD and similar things that use the FAT or FAT-32 file system. If they would produce hardware that did not require FAT or FAT-32 Microsoft would get nothing!

At this point most phones or tablets use SSD's and probably will not go away soon. Let us hope that the patents for these run out in the next 15 years.

Guest said:

Technically it's not extortion, it's racketeering.

Guest said:

i would ditch microsoft and google for apple if the prices weren't cheaper.

Archean Archean, TechSpot Paladin, said:

Well I have always sided with Steve Job's assertion that Google stole on the grand scale for android and I still stand by this, so frankly I have absolutely no sympathy for them. In fact he accused Eric of 'Grand Theft' .

Arris Arris said:

"Microsoft?s PR chief Frank Shaw replied to the statement via Twitter: "Let me boil down the Google statement ... from 48 words to 1: Waaaah.""

I wouldn't make this kind childish statement to the public about competitors of the company I work for and I'm not in PR. Really there are people out there that have very poor public images due to stupid things like this. It's like a playground/school retort.

Archean Archean, TechSpot Paladin, said:

Well people behave or say things which one may or may not agree, so I don't see much issue with it Arris, remember Steve's comments (although I'd say it will be prudent if people maintain at least semblance of objectiveness) "...... likens Google products outside of search to defecation".

fpsgamerJR62 said:

Android's success also helps fatten Microsoft's bank account. I guess in this case MIcrosoft really out maneuvered Google.

Mizzou Mizzou said:

Well I have always sided with Steve Job's assertion that Google stole on the grand scale for android and I still stand by this, so frankly I have absolutely no sympathy for them. In fact he accused Eric of 'Grand Theft' .

Behind the scenes Google is gobbling up as many patents as they can; it appears they are playing the same game as Microsoft.

Google acquired a number of patents over the past few years, either by purchase or by license. Those include a good number of of phone related patents from Verizon, patents involving video and streaming data from IBM, as well as hardware-related patents from patent holding companies. A few of the IBM patents are the kind you might license if you want to develop self-driving cars. There's been a lot of discussion about Google's many acquisitions of the past year, with 40 mentioned in their September 30, 2010 10-Q filing with the SEC, and a few more since then. But, Google's acquisition of 77 granted patents from Verizon, and another 51 granted patents from IBM happened with absolutely no media attention as far as I can tell.
from this article Google Patents

"Microsoft?s PR chief Frank Shaw replied to the statement via Twitter: "Let me boil down the Google statement ... from 48 words to 1: Waaaah.""

I wouldn't make this kind childish statement to the public about competitors of the company I work for and I'm not in PR. Really there are people out there that have very poor public images due to stupid things like this. It's like a playground/school retort.

Agree, making no comment would have been a far better response than this. This does nothing except further tarnish Microsoft's less than stellar PR image and plays right into Google's hands.

gwailo247, TechSpot Chancellor, said:

I think the difference here is that they are licensing the technology, not, oh, I don't know, issuing injunctions and suing to stop sales.

MS owns patents. So does Google. So does Apple. We all understand that, and we all understand that part of any device's cost comes from paying patent fees. But unless the whole system is scrapped, why is MS the bad guy all of a sudden.

Unless Google allows other companies to use its patents for no charge, in which case I retract my post.

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