Samsung pays Microsoft for Androids in attack of the phones

Samsung has agreed to pay royalties to Microsoft for every handset it sells running Google's Android OS. Could the smartphone wars be any more confusing?

by Dave Waller
Last Updated: 07 Oct 2011
Samsung has become the seventh handset manufacturer to sign a deal with Microsoft in the last three months to hand over royalties for using Android, which in turn relies on Microsoft IP. The latest is HTC, which signed a similar deal with Microsoft last month, promising $5 per phone.

What a position to be in. Google’s Android OS is the leading smartphone software – according to researcher IDC, 430m Android handsets will be sold annually by 2015. HTC and Samsung handsets already account for 50% of Android sales in the US. Ker-ching. You can imagine how smug Microsoft must be getting cash coming in from a rival, simply because it activated another rival’s technology (around 300,000 handsets a day at the mo), especially when Microsoft’s been notoriously slow getting in on the smartphone act itself. Does it get any sweeter than that?

In fact it’s just another sign of how complicated this smartphone scrap is. As we’ve seen with the constant suing and counter-suing between Samsung and Apple, so many big-name companies are all scrambling for a footing, but each relies on others’ technology. It’s like an army shooting the hell out of the country that supplies its bullets. And as the industry-wide patent suits grow uglier, Microsoft is now laughing.

The basis of all this is that Microsoft claims Android infringes on some of its own IP rights. But it still seems harsh that the hardware maker should be the one to cough up, when it’s Google that’s the one that’s done the infringing. Surely having to pay royalties undermines the fact that Android OS is free and open-source. It also suggests there’s an opening for Microsoft: surely it should make an effort to catch up, and offer a more secure infrastructure that doesn’t then land the handset makers with further royalties claims. Google’s doing something about that – trying to acquire Motorola Mobility for $12.5bn in a bid to get the patents to shield itself with better legal cover.

For now though it’s left resorting to taking pops at Microsoft for its lack of creativity. ‘Failing to succeed in the smartphone market, they are resorting to legal measures to extort profit from other’s’ achievements and hinder the pace of innovation.’ You can expect Microsoft to counter by waving its handbag and arguing that it’s all fair game, given that Google’s technology relies on its innovation in the first place, while Apple no doubt snickers in the background. Ah, the catty world of IP...

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