Monday, July 11, 2011

Microsoft demands $15 per Android phone from Samsung!

“Android has a patent fee. It’s not like Android’s free. You do have to license patents. HTC’s signed a license with us and you’re going to see license fees clearly for Android as well as for Windows.” – Steve Ballmer, CEO, Microsoft.
Yes its true! Microsoft has asked Samsung to pay $15 per Android phone shipped. Confused? I know you are. You are probably wondering how can Microsoft demand money for a Google Product right? You have many questions like these and this blog-post will try to answer some of them.

What makes Microsoft eligible to charge for Android phones?
Microsoft can charge for Android because of the Intellectual Property Rights it has on the technology used in Google’s Mobile Operating System.
The software giant has a wide range of patents used in the mobile platform. And there are countless lines of proprietary code in Android, and any number of ways that code -- or, yes, possibly code from the Android Open Source Project itself -- could infringe on another company's patents.

What is Microsoft’s stand on the matter?
For the past year or so, Microsoft has been saying that it holds patents on technology used in the Android mobile operating system, and has been either suing or signing licensing agreements with phone and computer manufacturers that use Android. It signed a deal with HTC in April 2010, and has sued Motorola over its Droid line and Barnes & Noble over its Nook e-readers.
In October 2010, Microsoft essentially said companies using Android need to pay up or get sued.

Has Microsoft signed patent-licensing deals with other Android makers?
Microsoft has announced a flurry of patent-licensing deals with smaller Android makers, including General Dynamics Itronix, Velocity Micro, Onkyo and – on Tuesday – Wistron. Microsoft said the Wistron deal also includes coverage for devices running Google’s Chrome browser platform.

Is Microsoft going to stop pursuing these licensing agreements?
With so many customers on its Android books, it’s unlikely Microsoft is going to stop pursuing these licensing agreements. The next target is already in its sights, and this is no small fish. Microsoft is reportedly demanding Samsung pays $15 per Android smartphone it ships.

Why target Samsung?
Samsung is the top mobile-phone manufacturer in the United States, with an average market share of 24.8 percent from March to May, comScore said Tuesday

Analysts forecast Samsung, the world’s No.2 handset maker, to have sold about 19 million smartphones in the April-June quarter, with the dominant position running on Android. It is widely expected to emerge as the No.1 smartphone maker, replacing Nokia’s more than 10-year reign.
Samsung’s Galaxy S II, successor to its flagship Galaxy S smartphone, which runs on the Android platform, has sold more than 3 million units since its debut in late April.

Why is Microsoft going for the licensing-agreements?
Google Android’s average U.S. market share among operating systems was 38.1 percent over the same period, the research firm said, followed by Apple’s iOS at 26.6 percent, Research in Motion’s BlackBerry at 24.7 percent, Microsoft’s Windows Mobile and Windows Phone (combined) at 5.8 percent, and HP’s Palm at 2.4 percent.
The move comes as Android phones gain in popularity. Microsoft charges handset makers such as HTC and Samsung to use its Windows mobile software and has tied up with Nokia to challenge Google and Apple Inc in the smartphone market.
When Android started to get picked up by a number of major manufacturers to use in their phones and tablets, we all rightly thought Microsoft would be on its back foot. If it wasn’t for patents the company probably would be, but as it stands, Microsoft is increasingly making more money from the sale of Android devices.

What’s Samsung’s take on the matter?
Samsung hasn’t officially responded  or even agreed to comment on the demand, but it is expected that rather than fight it the company will try and do a deal to lower the price per phone.

What can Samsung do about it?
Samsung can’t really contest this because so many other companies operating in the same markets have signed up for a license. But Samsung does have the advantage of being a desirable hardware partner for Microsoft.
With that in mind we could see some new Windows Phone 7 and Windows 8 devices make it on to the Samsung product list in the near future. In exchange, expect that $15 to come down to $10, or even $5 to match what HTC are thought to pay.

What makes me Happy?

If Samsung really signs with Microsoft for more Windows Phone 7 or 8 devices, it’s quite possible that Samsung’s Software Engineering Lab, Noida will get some project. As of now only HQ covers Windows Phone projects. Since as a Microsoft Student Partner I have delivered sessions on Windows Mobile 6.5 and Windows Phone 7 and also submitted apps, it’ll be like a dream come true to finally work hard-core on Windows Phone!

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