Microsoft Tightens Licensing Grip on Android

by Matt Klassen on January 13, 2012

The tech world has known for quite some time now just how profitable Android is for Microsoft, with the company inking several lucrative licensing deals with Android partners that have ironically funnelled money away from Google and into the PC giant’s pocket. In fact, last year analysts estimated that Microsoft made more money off its Android licensing deals then it did off its own burgeoning Windows Phone OS.

Like the company or not, the genius of this is that Microsoft has taken a completely different route in the ongoing patent wars than other competitors like Apple. Where the latter chooses to fight each patent infringement case to the fullest extent of the law, Microsoft has a taken a collaborative approach, one that allows competitors to continue producing Android phones while paying licensing fees that continue to line Microsoft’s own pockets.

With ten such Android licensing agreements already in place—most notably with Samsung, HTC, and Acer—this week Microsoft announced that LG has been added to the inglorious list. Not a great start to a year in which many thought Google would go on the offensive against such legal wrangling.

Although criticized by some for its legal practices in the mobile space, Microsoft has found a way to survive—indeed to profit—while it slowly grows its own mobile OS. Holding patents relating to how operating systems work—specifically Android and Chrome—Microsoft has taken a different more collaborative approach to waging its own patent war.

Instead of getting mired in prolonged expensive litigation, Microsoft has allowed device makers like LG, HTC, and Samsung to license the patents they are purportedly in violation of, striking deals that see device maker pay Microsoft for the privilege of making Google phones. This means, of course, that companies like LG now have to increase the prices of their Android phones to turn a profit, but with Android phones still selling like hotcakes, it’s unlikely anyone will complain…yet.

But here’s what confuses me: With its acquisition of Motorola many saw Google taking a big step into the mobile space, providing itself with a legitimate front in the mobile space—which truthfully Google has little presence in despite Android—and giving the search engine giant a much needed platform to defend its Android OS from just such attacks. But yet we see no action whatsoever.

If I were one of Google’s many Android partners I think I would be feeling a little annoyed as the shine seems to be coming off the company’s free open source mobile OS.

First, as an Android partner I’m not finding much support from the search engine giant, having to sign these licensing deals with Microsoft just to avoid expensive and prolonged legal trouble. Second, now that I pay Microsoft stiff licensing fees I’m watching my profit margins slip away, as Android has only found success by being an affordable option to Apple’s expensive iPhones. Finally, I’m watching Motorola—the darling of Google—avoid these sort of legal headaches altogether, as in the mobile Cold War the big companies are unwilling to engage each other directly. It just doesn’t seem fair.

Whether any of this will be enough to send Google’s Android partners searching for other OS options, however, remains to be seen.

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Written by: Matt Klassen. Follow by: RSS, Twitter, Facebook, or YouTube.

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