Microsoft now paid royalties on 70% of US Android smartphones • Hacker News Board

Re: Microsoft now paid royalties on 70% of US Android smartphones

#21

Post by gvb » Sat, Jan 14, 2012, 2:53 PM UTC

Think about this from a different point of view: the reason Microsoft is threatening cell phone manufacturers and extracting royalties is because they are trying to slow down the Android juggernaut enough to get traction with WP7. Obviously, has not been effective.

I would posit the reason phone manufacturers are paying royalties as opposed to cross licensing patents is because Microsoft doesn't have enough market share for HTC, LG, (Google?), etc. to make it worth while for manufacturers to trade their patents for.

In other words, phone manufacturers see $10 (a guess) per phone payed to Microsoft today is cheaper in the big picture than licensing WP7 instead of Android on those phones. In addition, it implies they value their own patents more than that amount and thus refuse to cross license their own patents to instead of paying the Microsoft royalty.

The logical conclusion is that phone manufacturers have looked in their crystal balls and bet strongly against Microsoft. They are betting that, in five years (a guess), Microsoft will be out of the phone software business and their patents will be irrelevant because they have either expired or been worked around.

The phone manufacturers are also remembering the iPhone vs. Windows Mobile / Windows Phone timeline and remembering how long they were getting buried by Apple because Microsoft was not able to sell them a credible alternative to the iPhone. Screw me once, shame on you. Screw me twice, shame on me.

Re: Microsoft now paid royalties on 70% of US Android smartphones

#22

Post by jroseattle » Sat, Jan 14, 2012, 3:03 PM UTC

At first, this really pissed me off -- Microsoft sticking it to everyone with Android.

But 11 companies with Android products on the market are paying licensing fees to Microsoft? That's way too many lawyers in agreement for this to something superficial.

Where the hell is Google in all this? I thought they were going to defend OEMs? Honestly, I can't say that I'm surprised. Google might be a big force in the industry, but in old-school software licensing, they're noobs.

Re: Microsoft now paid royalties on 70% of US Android smartphones

#23

Post by funkah » Sat, Jan 14, 2012, 3:27 PM UTC

molmalo wrote: post #2

So, if Google makes money with Apple stuff (iPad, iPhone with search, maps, etc), and Microsoft makes money with Android... Let's close the circle! Let Apple make money with WP7! (C3 technologies for bing maps could do it...) And everyone will be happy forever! (Or not). Seriously, Ballmer should send a really nice corporate gift to Brin, Page and Schmidt, with a card: "Thanx pals!"

What are you talking about?

Re: Microsoft now paid royalties on 70% of US Android smartphones

#24

Post by av500 » Sat, Jan 14, 2012, 3:32 PM UTC

Most of them pay nothing at all. Samsung, HTC and LG made a deal where they agreed to make a few Win7 phones in exchange for patent freedom from M$. Part of the deal is to still claim that they are paying royalties in order to uphold this FUD. M$ hopes that this way they will make some money via Win7 phones.

Look at B&N, they are fighting M$ in court because they cannot make a deal like the phone people did.

Re: Microsoft now paid royalties on 70% of US Android smartphones

#25

Post by ge0rg » Sat, Jan 14, 2012, 3:36 PM UTC

av500 wrote: post #24

Most of them pay nothing at all. Samsung, HTC and LG made a deal where they agreed to make a few Win7 phones in exchange for patent freedom from M$. Part of the deal is to still claim that they are paying royalties in order to uphold this FUD. M$ hopes that this way they will make some money via Win7 phones. Look at B&N, they are fighting M$ in court because they cannot make a deal like the phone people did.

Can you please provide a source for your information?

"HTC Pays Microsoft $5 Per Android Phone, Says Citi": http://www.businessinsider.com/htc-pays-microsoft-5-per-andr...

Re: Microsoft now paid royalties on 70% of US Android smartphones

#26

Post by av500 » Sat, Jan 14, 2012, 4:15 PM UTC

ge0rg wrote: post #25

av500 wrote: post #24

Most of them pay nothing at all. Samsung, HTC and LG made a deal where they agreed to make a few Win7 phones in exchange for patent freedom from M$. Part of the deal is to still claim that they are paying royalties in order to uphold this FUD. M$ hopes that this way they will make some money via Win7 phones. Look at B&N, they are fighting M$ in court because they cannot make a deal like the phone people did.

Can you please provide a source for your information? "HTC Pays Microsoft $5 Per Android Phone, Says Citi": http://www.businessinsider.com/htc-pays-microsoft-5-per-andr...

There is no official source on that which I could quote. But it is what I have been told by people involved.

There is another aspect, a lump sum of 5-15$ per unit might look like a lot of money for M$, but over a 2y period thats not much. All that such a deal would do is to make the phone a bit more expensive, same as if another earthquake hit and some parts like CPUs or RAM became more costly. Carriers would easily swallow that for subsidized phones. All the search revenue, App store revenue etc. would still go to others like Google. And most important, the customer would be lost to M$ - If M$ wants to take a significant market share in mobile, collecting royalties on Android is not the way.

Re: Microsoft now paid royalties on 70% of US Android smartphones

#27

Post by ge0rg » Sat, Jan 14, 2012, 4:56 PM UTC

av500 wrote: post #26

ge0rg wrote: post #25

Earlier quoted context omitted.

Can you please provide a source for your information? "HTC Pays Microsoft $5 Per Android Phone, Says Citi": http://www.businessinsider.com/htc-pays-microsoft-5-per-andr...

There is no official source on that which I could quote. But it is what I have been told by people involved. There is another aspect, a lump sum of 5-15$ per unit might look like a lot of money for M$, but over a 2y period thats not much. All that such a deal would do is to make the phone a bit more expensive, same as if another earthquake hit and some parts like CPUs or RAM became more costly. Carriers would easily…

I do not know the licensing fee involved with WP7, but demanding higher royalties on Android devices might be a way to push vendors into switching.

Also, 5-15$ is significant when comparing it with the manufacturing costs of the device (the iPhone 4S CPU is estimated at 15$ by iSuppli (http://www.isuppli.com/Teardowns/MarketWatch/Pages/For-the-i...).

Re: Microsoft now paid royalties on 70% of US Android smartphones

#28

Post by gvb » Sat, Jan 14, 2012, 5:51 PM UTC

kahawe wrote: post #18

Could someone enlighten me what all those vendors licensed from Microsoft?

No. Seriously. The people that know are bound by nondisclosure agreements that exclude you (and me). Everybody else is just speculating.

Re: Microsoft now paid royalties on 70% of US Android smartphones

#29

Post by groggles » Sat, Jan 14, 2012, 5:55 PM UTC

ge0rg wrote: post #25

av500 wrote: post #24

Most of them pay nothing at all. Samsung, HTC and LG made a deal where they agreed to make a few Win7 phones in exchange for patent freedom from M$. Part of the deal is to still claim that they are paying royalties in order to uphold this FUD. M$ hopes that this way they will make some money via Win7 phones. Look at B&N, they are fighting M$ in court because they cannot make a deal like the phone people did.

Can you please provide a source for your information? "HTC Pays Microsoft $5 Per Android Phone, Says Citi": http://www.businessinsider.com/htc-pays-microsoft-5-per-andr...

The Citi claim is based upon absolutely nothing. For that matter every single "Microsoft makes $X from Android" are based upon nothing but speculation.

Show me a line item in either HTC or Microsoft's quarterlies validating that?

It is interesting that virtually every agreement that Microsoft has achieved has been with vendors that sell Microsoft products.

Re: Microsoft now paid royalties on 70% of US Android smartphones

#30

Post by huxley » Sat, Jan 14, 2012, 6:34 PM UTC

gvb wrote: post #21

Think about this from a different point of view: the reason Microsoft is threatening cell phone manufacturers and extracting royalties is because they are trying to slow down the Android juggernaut enough to get traction with WP7. Obviously, has not been effective. I would posit the reason phone manufacturers are paying royalties as opposed to cross licensing patents is because Microsoft doesn't have enough market sh…

Acer, Samsung, LG, ZTE and HTC all make Windows Phone 7 models. That's most of the big Android licensees right there (Motorola being one of the big holdouts in both royalties and WP7 phones). Obviously they aren't so pissed that they won't invest some cash in building WP7 kit.