Microsoft: Hey Google, look at our deals with Samsung and HTC

By Tom Warren, on 28th Sep 11 2:05 pm with 58 Comments

Microsoft flexed its muscles on Wednesday after revealing a significant Android patent deal with Samsung.

The software giant will receive royalty payments for each Samsung smartphone and tablet that ships with the Google Android operating system. The deal is significant for a variety of reasons. Microsoft signed a similar deal with HTC last year which is rumored to net the company $5 per Android HTC device. Samsung and HTC account for more than half of all Android phones sold in the U.S. over the past year. The latest deal means that Microsoft pockets a fee for every Samsung Android device sold. The company refuses to disclose the terms of the deal but if it’s similar to the HTC rumored price then it’s likely to be around $5 per device. Combined with HTC’s sales, this is an easy revenue stream for Microsoft.

Investors reacted to the news by trading Microsoft stock in the thousands on Wednesday morning. Microsoft’s stock price jumped 2% in early morning trading on the NASDAQ stock exchange shortly after the opening bell. Microsoft claims that its latest deal proves that “licensing works” in the patent world. “They show what can be achieved when companies sit down and address intellectual property issues in a responsible manner,” said Microsoft’s Brad Smith, General Counsel, in a blog post on Wednesday. Smith recognized that Google has complained in the past about the impact of patents on Android and software innovation. “To them, we say this: look at today’s announcement. If industry leaders such as Samsung and HTC can enter into these agreements, doesn’t this provide a clear path forward?” said Smith.

Microsoft’s Samsung deal isn’t the last of its kind. The company ” remains committed to entering into similar agreements with other handset manufacturers,” according to Smith. Microsoft has managed to sign deals with seven Android manufacturers in the past three months and is currently involved in litigation with Motorola. Microsoft filed a complaint with the International Trade Commission (ITC) recently, asking the ITC to block imports of some Motorola Android phones in the United States. The resolution could be a lengthy process due to Google’s recent acquisition of Motorola Mobility.

Google announced in August that it plans to acquire Motorola Mobility for $12.5 billion. Google CEO Larry Page noted at the time of the deal announcement that Microsoft and Apple are “banding together in anti-competitive patent attacks on Android.” Citing recent patent auctions, Page expects that Google’s acquisition will help protect Android in the future. A number of analysts believe Google’s deal could be beneficial to Microsoft’s Windows Phone, creating more competition between the three major smartphone operating systems.

Microsoft’s latest deal with Samsung will also prove beneficial to Windows Phone. The company revealed on Wednesday that Samsung and Microsoft will “cooperate in the development and marketing of Windows Phone.” Dr. Won-Pyo Hong, executive vice president of global product strategy at Samsung’s mobile communication division revealed that the collaboration will begin with Windows Phone 7.5 devices this fall. “We are pleased to build upon our long history of working together to open a new chapter of collaboration beginning with our Windows Phone “Mango” launch this fall,” said Hong. Samsung and Nokia’s Windows Phone 7.5 devices will likely prove popular over the upcoming holiday season. The launch of Windows Phone 7.5 “Mango” indicates that Microsoft is ready to fight competitively in the smartphone market. The backing of HTC, Samsung and Nokia will almost certainly propel Windows Phone into the top three mobile operating system in 2012.

Microsoft may have been down and out with Windows Mobile but the company is very much in the ring with Windows Phone, floating like a butterfly and stinging like a bee.

  • http://twitter.com/OldCongress Gamer

    Now who’s next? I expect ZTE, Hwawei, LG to be the next, patenting Microsoft’s patents for Android.

    • Anonymous

      Do ZTE and Hwawei sell their devices in the western world?  If they stick to the Chinese market, I doubt they will ever have to worry about IP from Microsoft as a US company.

    • Justfortherecord

      They sell here in the US. You can pick up their products at Best buy, Newegg, hhgregg, and a host of other places.

    • Anonymous

      In that case.  Go get ‘em Microsoft.

    • http://twitter.com/OldCongress Gamer

      bogus product are everywhere in China. I hate the fact that the communist doesn’t give a damn about it

    • Guest

      Or that every Western country opens their door to Chinese imports despite that.

    • Anonymous

      I don’t give a fuck if you love or hate. As if I need to be worried about what you think about us. Asshole

  • http://www.facebook.com/people/Pedro-Roque/100000194503830 Pedro Roque

    Time to pay!

  • UserX1

    I´m still wondering… wich technologies is Android using from MS?

    Just for curiosity

    • Rfrederick_PMP

      Microsoft bought Danger/Sidekick > Kin before Android became Open Source plus they own a lot of smartphone IP from WinMo.

    • Anonymous

      The patent battle has nothing to do with the danger deal or people nor is it related to winmo. Basically microsoft owns patents on some ui elements like scroll bars and other not very major technologies but without them the user experience of a smartphone today cannot be complete. Apple does too.

      Namely the way a list or a screen compresses when the end of it’s contents is reached and then bounces back up like a spring loaded object. Apple in fact is seuing samsung soecifically over those features because android stock does not include such user experience. Samsung decided to extend and customize android with such features to be able to compete with the iphone throu its galaxy line of products.

      Microsoft and apple have a patent sharing agreement in place and has been for years whic is why you never hear about Microsoft and apple sueing one another much and why windows phone gets to use said effects and why apple products likewise offer effects you’ve come to know through windows and other Microsoft products.

    • Anonymous

      I don’t think you will ever find out in the cases of these deals since they are private between MS and the respective companies (HTC, Samsung, Acer, ect…).  But you can look up court documents to see what MS is claiming against Motorola.  I suggest checking Florian Mullers blog for more information, http://fosspatents.blogspot.com/

  • http://levelten.org tdmiller productions

    pay up time! 

  • Anonymous

    Google bought themselves a world of headaches when they purchased Motorola. After Microsoft wins in court against Motorola (it’s coming), don’t be surprised if either Google pays Micorosoft a license fee to cover Andriod OEM’s (once the deal goes through between Google and Motorola) or they get sued directly and they will lose seeing all of their OEM’s are paying a license fee to Microsoft. They don’t have a leg to stand in court, the other OEM’s know it and I think Google knows it too, else they would have provided patent protection from the begining and their OEM’s wouldn’t be in this situation in the first place.

    • http://twitter.com/OldCongress Gamer

      I was thinking the same too… if Motorola (Google) were to pay Microsoft, other Android OEMs will then follow and that spells doomsdays for Android being free

    • Anonymous

      When you say “I think Google knows it too” I think you are giving their legal department too much credit.  Remember, these are the people that passed on a small 100 million dollar agreement from Sun for copying the Java Virtual machine.  Now they are going to have to pay billions to Oracle and possible future royalties.  Their legal team also must have failed to mention to their bosses that its a bad idea to aid and abed in the sale of illegal pharmaceuticals.  And now we see with this Samsung news that their Motorola acquisition may have been a huge waste of 12.5 billion dollars.  Perhaps the smartest move Google could make right now would be to fire their whinny legal head and his entire team.  Go out and hire a real legal department because you are playing in the big leagues now.

    • Anonymous

      I would add, 12.5 billion is not only wasted. It’s toxic. The way HP did with 1.2 Billion for Palm. HP even said putting WebOS on every PCs. Obviously that damaged the trust from your partners (MSFT). HP is in deep trouble. Everyone who think HP can drop PC business becoming another IBM are too naive. 

    • Guest

      I agree. But in your HP story is a little one-sided. Recall that MS royally screwed them over when at the last minute, after HP had invested heavily in better-equipped PCs, MS suddenly relaxed the Vista-ready requirements (to help Intel, as it turns out). That left a lot of bad blood. And then you had the lack of a leaner mobile OS, which HP, Dell and others had been asking MS for for years. So there are two sides to the story and MS wasn’t blameless here. 

    • Anonymous

      Android is not free. So far it has cost google $12.5 billion and with no end in sight….

    • Anonymous

      Well they know it now. If they didn’t know back then during Andriod’s inception, then they were irresponsible when it came to other companies (Oracle and Microsoft) intellectual property.

    • Guest

      If you look at the documents made public via the Oracle lawsuit, there is no doubt that Google was aware their were infringing the patents of others. Indeed the emails are so damaging on that point that Google has tried various maneuvers to have them removed from deliberation. So far without success.

    • Tom

      I asked Brad Smith, after a talk that he gave, why he thought Google seemed to be having all these problems.  (This was a year ago, so I didn’t ask about patents. I remember it was shortly after the Google+ privacy fiasco.)

      His response was that he doesn’t think Google has a proper sign-off process in place.  Microsoft had to do this after the antitrust trial, and while it doesn’t catch everything, it puts enough of a barrier in place to keep them out of trouble.  In his opinion, Google is just winging it.

    • Anonymous

      That’s why I say Google is a tehnology pretender. A technology company in business for 10 years and no patent. You can only find that in small businesses.

      I said android is dead. I didn’t even think of legal factor. My reason is: Windows Phone is superior to Android. Yes, you can add a few feature here, they can add a few there, but the fundamentals won’t change. WP7 is fast, smooth, beautiful, stable, easy to use, well integrated. I don’t know how Android or iShit can ever match that in years. They are saying, people just buy it no matter what. That kind of thing is the past.

    • http://twitter.com/OldCongress Gamer

      Quite true, but I hate the fact that Microsoft don’t learn unless they fall.
      Look at Steve ballmer, he’s hilarious.

      He laughs at iPod, iPhone when its first released and what happened? They were caught off guard again and again.

    • Anonymous

      People keep making fun of Ballmer for “laughing at” the iPhone on first release.  What he said though was that the iPhone was a really expensive phone, and it was when it first came out.  Wasn’t it like $500 on contract or something?  If the future price drop had never kicked in, Ballmer would probably have been right and iPhone would not be as popular as it is today.  No one, other than hard core Apple fans, would pay $500 for a phone on contract.

    • Anonymous

      Guess what – the entire industry is laughing at Windows Phone right now. Who will get the last laugh now?

    • Guest

      Correct. They just repeat the same mistake over and over. Instead of writing off iPhone because it was initially too expensive, Ballmer should have recalled how badly iPod beat playsforsure and Zune, respected Apple’s marketing pull and manufacturing muscle, and realized they could easily adjust the price, which is what they did and went on to destroy WM and MS’s decade head start in smartphones. Then he went ahead and made the same mistake with iPad. And here we are 30M units sold later, and MS, the person who pioneered tablets for a decade before iPad, won’t have an answer for at least another year.

      Ballmer is serially over confident. Then MS gets caught by surprise. And then they waste a year or two in denial before spending another year or two readying a response that should have been their to preempt Apple, not lag it years later.

    • Guest

      Well, they have one at least. Because they’re the only major technology company founded on a patent. Although apparently they now believe the patent system itself is deeply flawed. Can you say hypocrites?

    • Guest

      Actually even that one doesn’t belong to them. It’s registered to Stanford. They just have a perpetual right to use it, which they bought in exchange for a bunch of Google shares.

    • Anonymous

      Google is an ad engine that uses technology as it’s fuel. Period

    • Guest

      It gets worse. Apple is also suing MMI. And unlike MS, Apple normally wants the products removed from the market.

    • Guest

      It has been widely speculated that Google was forced into buying them because a) MMI was threatening to use their own patent arsenal against other Android OEMs and b) they were about to sign a licensing deal with MS similar to this one with Samsung.

      Well played MS.

    • Anonymous

      The CEO of mmi stated publically a week or 2 before the acquisition by google was announced that if Microsoft is willing to give them a nokia like deal that they’ll gladly start cranking out WP products right away…

  • Anonymous

    You do know Windows Phone will be sold in China by Nokia and other OEM’s including ZTE. Microsoft will not stop till evey Andriod OEM or Google themself is paying them a patent fee.

    • Anonymous

      I was just saying that it can be hard for foreign companies to get the government of China to enforce copy/right laws.  But since ZTE sells stuff outside China, MS should be able to get them to sign a cross license deal.

    • Anonymous

      Yeah, that is true. You do have to take into account the different governments when you think about bringing a case against.

    • Anonymous

      The Chinese want what the rest of the world gets to play with and if they’re the only ones left with android at the end of this battle then it’s just as good as dead.

      I have yet to hear about a fake android store opening in china…

  • alterSchwede

    Although i don’t like the patenting system itself and especially the U.S. one but it’s good to see that companies are able to discuss agreements themselves and not only with an upcoming lawsuit.

  • Anonymous

    things are getting funnier.

  • Anonymous

    Dear Google, Windows Phone Mango woops your little Android butts without these manufacturer deals! Thanks a lot for the spare change though. Now go and steal someone else’s ideas or try and come up with a new, innovative idea for your platform, e.g. virus scanner!

  • Flying Madden

    Android is free like free beer..it is Google that pays :D

  • Falken

    Yes, time to pay! Comunism failed! “Časy jsou zlé Kamile. Pro mě, pro tebe, pro nás pro všechny. A proto, tlusťochu zaplať!” J.P. Belmondo as Borovitz :-)

  • http://pulse.yahoo.com/_K7KRW5YLTCWWSNDS7IFV7GSQD4 Manas

    Does anyone know exactly which part of the android OS is Microsoft’s intellectual property?

  • WM

    Gingerbread, Froyo, Ice Cream Sandwich…

    Looks like MS is eating Android’s desserts.

    • Anonymous

      Quality not quantity

  • Guest

    This is positive for MS because of the licensing. But the agreement to work on WP is also encouraging. Because there had been rumors lately that maybe Samsung was moving away from supporting it.

    • Anonymous

      Your ass is moving away from Samsung. 

  • http://twitter.com/abhi1manyu Abhimanyu Jamwal

    for everyone’s info, microsoft owns the second highest patents relating to mobile phone devices and the worse for google and android oem’s is the fact nokia is the leader. hence, the have little or no place to hide as both the companies are going all out to kill android. My guess is soon, google will open source itself and rename itself as google foundation much like linux foundation. They have no protection against the big guns it constantly thinks are now smaller than its ego.

    • Guest

      Google open source itself? Um, no. Maybe remove some of the current restrictions on the currently “open source” Android. But that’s about it. You’re right though that they can’t defend Android’s IP. Which is why their arming themselves with patents from others in order to mount a “counter suit” defense.

    • Anonymous

      They bought the wrong patent portfolio!

      They are either way in over their head or know something the rest of the world doesn’t know…

    • Anonymous

      Yeah and MSFT & Nokia are in bed together which means that their combined patent portfolio is awesome.

    • Anonymous

      Don’t talk out of your ass. Go to primary school first and then come here. Nokia is the leader in mobile patents?? What kind of shit are you smoking?

  • Anonymous

    Even if Samsung/HTC sell 100 million Android device a year, that’s $500 million pure profit for MSFT. Not bad, but small change compared to their bottom line. However, in a leaner/meaner MSFT that $500 million can go a long way in R&D!

  • Anonymous

    google makes all this money on the backs of people by spammin them with ads nobody wants and it should at least use some of that cash to pay for the patents it is stealing from apple and msft. just a thought google.

    • Anonymous

      It’s not that simple. Even if google wanted to, they probably can’t do so. First of all by providing android to OEMs as a free and open source software. Meaning they are not responsible for what you, me, motorola or samsung end up doing with it. Which is why you’re seeing Microsoft and apple going after the OEMs and not google directly.

      If google does not make money off the software then google is not injuring Microsoft or apple, which is a complete myth because google makes money off the ads and the usage data the software provides.

      So far they’ve been able to stay out of the crosshairs of both ms and apple; the motorola acquisition puts google smack in the center of it though! They must have seen something compelling enough in motorola to pull the trigger on the acquisition though. Time will tell…

  • Guest

    Samsung is banking on their new OS Bada and Tizen, so they are not concerning about the money.

    • Mark

      good luck with that.

  • Corro’ll Driskell

    Personally, I find it very interesting that many people are onboard with Google’s unprofessional attitude.