Wait, Why Are Device Manufacturers Paying Microsoft?
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And, if Android device sales continue to increase, they could be making many more billions of dollars a year soon. If they’re getting more on average, they may be receiving more than $2 billion per year from Android device sales. The $2 billion per year figure an analyst came up with estimates that Microsoft is getting $5 per Android device sold. In 2011, a story in the South Korean Maeil Business Newspaper indicated that Microsoft was trying to get $15 per Android device sold from Samsung, while Samsung was trying to argue them down to $10. The same analyst revealed that Microsoft was suing device manufacturers for $7.50 to $12.50 per Android device sold. However, according to a Citi analyst, HTC is paying Microsoft $5 per Android device sold. Manufacturers are likely prohibited from releasing these details as part of the agreements. Microsoft and Android device manufacturers haven’t officially released any information on how much these patent royalty fees cost. In 2012, Microsoft announced that 70% of Android devices sold were now covered by their patent licensing agreements. Equally important, they enable licensees to make use of our patented innovations on a long-term and stable basis.” Our agreements ensure respect and reasonable compensation for Microsoft’s inventions and patent portfolio.
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“Amidst continuing clamor about uncertainty and litigation relating to smartphone patents, we’re putting in place a series of agreements that are reasonable and fair to both sides. They explain Microsoft’s philosophy when it comes to negotiating patent agreements with Android device manufacturers: While Microsoft hasn’t given us all the information we need on these licensing agreements, their corporate lawyers did release an interesting blog post about this subject back in 2011. If the device manufacturer won’t enter into a patent licensing agreement, Microsoft will likely sue them. To make things right, the device manufacturer needs to cut Microsoft in on the devices it sells. We do know that Microsoft tells Android device manufacturers that Android infringes on their patents. We’re piecing together all the information here from multiple sources. Microsoft has never officially revealed the details of their licensing agreements with Android device manufacturers.