Microsoft Continues To Milk The Android Cash Cow

by Gaurav Kheterpal on June 28, 2011

As much as I hate Microsoft products and always have, I have to admit that the Windows giant knows how to make money, even out of its competitors. While WP7 is still testing the waters, it looks like Microsoft is making more money off Android than its own Windows Phone OS.

Last month, my fellow blogger Matt Klassen revealed how much Microsoft has made off Android, and with reports stating that the Redmond-based company earns $5 per HTC Android smartphone sold; it’s a significant chunk of change. The Redmond-based company on Monday announced another patent-licensing deal, this time with General Dynamics Itronix.

And I’m sure this isn’t the last deal that Microsoft has struck to get licensing money out of companies using Android.

The agreement states that General Dynamics Itronix will license certain, unnamed Microsoft patents for use with Android-powered portables. Although the contents of the agreement have not been disclosed, Microsoft will receive royalties from General Dynamics Itronix under the agreement.

The General Dynamics Itronix devices are ruggedized mobile tablets, netbooks and ultramobile PCs. While most PC and netbook-based offerings run on Windows, the company is introducing “more diverse applications and increased functionality in products that incorporate the Android platform”. For instance, the GD300, a “Rugged Wearable Computer for Military, Federal/Civil and Commercial Field Service Personnel” runs on Android.

We are pleased to have reached this agreement with General Dynamics Itronix, which is an example of how industry leaders address intellectual property,” said Horacio Gutierrez, corporate vice president and deputy general counsel of Intellectual Property and Licensing at Microsoft.

Since Itronix does not deal in consumer devices, the licensing fee may be lower than what Microsoft gets from HTC. None the less, it’s a worrying sign for Android OEMs that Microsoft is seeking higher patent fees from other companies and other Android devices. Unless Google can find a magic wand to get its associates out of this licensing mess, its ‘free’ Android OS is now becoming more expensive, putting it on par with the licensing fees Microsoft charges for its own WP7 mobile OS, with Microsoft cashing in the whole way along.

While companies such as HTC and Itronix have surrendered to Microsoft’s might, Barnes & Noble is continuing its legal fight over Microsoft’s claim from earlier this year that the Android-based Nook e-reader violates Microsoft patents.

VentureBeat brings up an interesting point that Microsoft’s Android licensing revenue gives it an upper hand over Apple. Android continues to grow at an explosive pace and while Apple is watching its smartphone market share diminish, Microsoft is making the most out of the ongoing Android boom.

If you can’t beat them, threaten to sue them and they’ll surrender to your demands – and nobody plays this game better than Microsoft.

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Written by: Gaurav Kheterpal. www.digitcom.ca. Follow TheTelecomBlog.comby: RSS,TwitterFacebook, or YouTube.

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