Microsoft extracts royalty revenues from Android phone makers
Google provides Android for free yet for the most part, its deployment and usage require the assistance of other technologies exclusively owned by other firms such as Microsoft, which holds the right of web content rendering and navigation widely utilised in the OS platform.
Capitalising on that, the American firm launched its campaign of extracting revenues from handset makers that use Android on their products.
In a Wednesday report by PC Magazine, Microsoft and Taiwanese firm HTC forged a deal on April 2010 that will allow "broad coverage under Microsoft's patent portfolio for HTC's mobile phones running the Android mobile platform."
That deal, according to a ZDNet report requires HTC to pay $5 for every Android-powered device that they will produce and Microsoft is working for the same scheme to be applied on handsets that will be issued by South Korean firm Samsung.
Reuters reported that Microsoft has demanded for $15 per device payment set up but Samsung is negotiating for $10, which will then allow the phone maker to integrate its handset functions with the company's new mobile OS, the Windows Phone 7.
Apart from its Samsung concern, Microsoft is also pursuing Barnes & Noble for its bestselling e-reader Nook, which runs on Android, while it has closed a deal with another Taiwan company, Wistron, which produces gadgets powered by Android and Chrome.
According to Mary Jo Foley of ZDNet, Microsoft is using the $15 royalty demand as its way of convincing "Android vendors into signing onto the growing list of Android OEMs who've decided it's safer to settle than fight Microsoft over its IP claims."
Eventually, Foley stressed that parties willing enough to discuss amicable terms with Microsoft will be given much affordable price such as the case of HTC. As for Samsung, the ZDNet analysts said that the company may be able to bargain up to $7 for each handset.
Or the company may decide to strike a partnership with Microsoft instead, according to the Los Angeles Times, and manufacture its future phones using the software firm's WP7 once consumers have had enough of its Android-based Samsung's Galaxy S II, which has sold over three million units since its debut earlier this year.