Over the last few weeks, Microsoft had gunned down a number of Android smartphone and tablet manufacturers and reached a licensing agreement with those companies as Microsoft claims that by making and selling products utilizing the Android operating system, these companies are misappropriating patent technologies that Microsoft owns.
Microsoft has gone as far as going after some of its long-time and key partners in the mobile space, and it is believed that Windows Phone and Windows Mobile manufacturer HTC had agreed to a $5 per handset licensing fee per Android smartphone that it sells. Now, Microsoft may be going after Samsung, which makes Windows Phone, Android, and Bada OS devices, with a licensing fee as high as $15. The licensing fee that is speculated to be requested by Microsoft from Samsung is on the high side, and at $15 per Android phone, that fee would be the equivalent of a license of Windows Phone.
Neither Samsung nor Microsoft are commenting on the issue, though it is believed that Samsung may ask that the licensing fee be dropped down to around $10. Other companies being targeted by Microsoft in the past include Winstron, Velocity Micro, and Itronix, for example.
While it is interesting that Microsoft’s patent licensing business could rival and top its Windows Phone licensing as Android’s popularity continues to grow, it does present new market opportunities for Microsoft as well. In the future, rather than ask for royalty payments, Microsoft could work out agreements with manufacturers where it could undercut Google in key areas where the search giant is utilizing Android to monetize its core business. Rather than asking for money from Android licensees who infringe on Microsoft’s mobile patents, Microsoft could ask manufacturers, for example, to make Bing search and Bing Maps the default search and mapping tools on Android smartphones.
This would be a clever strategy as it would help Microsoft grow its mobile search shares and build out its Bing franchise without having to rely on Windows Phone. Android smartphone makers have been also targeted by Apple as well, with Apple having filed lawsuits against Motorola and HTC in the past.
Although the Android operating system is given free to manufacturer to use from Google, Microsoft’s latest claims and Apple’s claims in the past shows that Android is in fact not free to use in the marketplace. With manufacturers having to pay Google’s rivals in the mobile space for technologies that are present in Android that the OS infringes upon, the cost of these royalty payments are either absorbed by manufacturers like HTC or are passed down to consumers through higher phone prices.
Microsoft’s move comes as Samsung is dedicating more of its resources to Android. The Korean phone-maker has gained the position of the leading Android smartphone maker and is expected to de-thrown Nokia for the position of top smartphone maker.
Recently Microsoft publicly asserted for the first time that Google’s Android operating system infringes on its intellectual property. Microsoft has taken the position, according to those close to the company, that Android infringes on the company’s patented technology and that the infringement applies broadly in areas ranging from the user interface to the underlying operating system.
In a statement, Microsoft deputy general counsel Horacio Gutierrez said that, although Microsoft prefers to resolve intellectual property licensing issues without resorting to lawsuits, it has a responsibility to make sure that “competitors do not free ride on our innovations.”