Microsoft Inks Android Licensing Deal with ZTE

by Matt Klassen on April 29, 2013

The numbers remain a little hazy, but it’s hard to dispute the fact that, as Tom Krazit of paidContent puts it, “Microsoft’s most lucrative mobile strategy over the past three years has been driven by its lawyers, not its product-development team.” The Redmond company is clearly interested not only in protecting its own intellectual property, but making money off the mobile market any way it can, even if that includes moonlighting as a patent troll.

So with the ink still fresh on the landmark licensing deal Microsoft struck with Foxconn parent company Hon Hai last week, the PC giant announced it has struck yet another licensing agreement, this time with Chinese Android manufacturer ZTE, one of the world’s leading Android partners.

Although not as large as Foxconn, ZTE still stands as one of Google’s leading Android partners, shipping almost 10 million smartphone units in 2012 alone. The agreement with Microsoft now stands as yet another key piece in theRedmondCompany’s controversial Android coup, having locked up another lucrative royalty deal with another one of the top five Android manufacturers in the world.

The deal with ZTE, the first patent licensing agreement with a leading Chinese tech company and Android partner, is but the most recent move in the company’s ongoing efforts to secure as much licensing revenue as possible, and with ZTE and Foxconn both agreeing to Microsoft’s terms, I have to imagine any smaller holdouts will soon relent as well.

“Experience has taught us that respect for intellectual property rights is a two-way street and we have always been prepared to respect the rights of others just as we seek respect for our rights,” said Microsoft general counsel Horacio Gutierrez in a statement.

While terms were not disclosed, Microsoft did admit that the deal signed with ZTE was similar to that struck with Hon Hai, meaning it will cover all Android and Chrome products produced, which in turn will reportedly give ZTE licensed access to “Microsoft’s smartphone and tablet patents, including those for operating systems, browsing, data synchronization, and audio and video transfer.”

Although the earning estimates related to Microsoft’s own Windows Phone 7 project and its Android royalties are an ever-changing scene, as Krazit writes, “A series of estimates from Citi and Asymco pegs the revenue Microsoft…has collected through its patent licensing deal from HTC at $150 million, while revenue from Windows Phone 7 is said to be just $30 million.”

Even if the revenues numbers stemming from Windows Phone 7 have increased dramatically, consider that the royalties collected from Android partners is on the rise as well, meaning that Microsoft is still likely milking the Android cash cow for all its worth.

What’s interesting in all this is Google’s position on Android, as its no secret that given the growing defection of key Android partners and the removal of key Android leadership that Google is turning most of its attention to its own home-grown Chrome platform. Now couple that with the fact that Microsoft is making money hand over fist off the Android ecosystem, and perhaps soon Android simply won’t be worth Google’s effort.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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