Microsoft is squeezing $444 million from Android manufacturers!

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Microsoft is all set to squeeze $444 million through licensing fees from Android device manufacturers this year by asking them to pay $3 to $6 per mobile device launched in the market, as per a report from Goldman Sachs.

This amount represents only 4% of Microsoft’s projected revenue of this year. Clearly, collecting royalties is not Microsoft’s prime mobile strategy but this will cover up major part of the cost and hours spent on developing Windows Mobile.

Who is paying?

HTC signed-up with Microsoft to pay $5 per Android phone manufactured and sold. Recently, Samsung in agreement will pay $15 to Microsoft against per Android device they sell

Any manufacturer, looking forward to manufacture Android handset using technologies for which Microsoft is the patent owner, needs to get permission from them to use such technology in order to escape prosecution.

In one of such patent lawsuit settlements, Apple is paying Nokia $15 per iPhone.

And

HTC and Samsung are the two major companies are now in the line of attack while both of these companies already have scheduled to release Windows Mobile 7 phones with Mango update.

Motorola is their next target soon which has no plans to release a Windows Mobile phone and I don’t think they will ever release it after Google taking over.

Such patent royalties adds to the device price but looking into the success of Android devices, I would not mind paying $15 upfront for a better performing OS and eventually a device.

Remember, device manufacturers already pay Microsoft $10-12 as a licensing fee simply to embed their Windows Phone OS in to the device, but according to Goldman, “We believe this licensing fee potentially could be negotiated if the handset manufacturer is willing to install and support Windows Phone on more devices.”

Help from Nokia

Nokia and Microsoft deal which happened in February this year through which, Nokia would focus on manufacturing devices using Windows Mobile OS. Not just that, it also entitles for patent gains that Nokia already own for radio technology, multimedia technology, computer connectivity and more.

This gives enough ammo to Microsoft lawyers to attack!

Note

Will Android eventually lose the battle sometime?
Will current Android device manufacturers stop building these devices?

Well, I am not afraid of these questions because – I wound rather spend $15 more the first time to get a device with better mobile OS. I hope this message reach all Android device makers.

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Source The register

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Tushar Tajane

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