World's most profitable Android company? Microsoft!?

[aradhakr84]

Here is the link of interesting articles about how Microsoft is milking money from their deal with Samsung

World's most profitable Android company? Microsoft!? | ZDNet

Summary: Who makes the most money from Android is an open question, but according to Goldman Sachs, with an estimated $444-million Microsoft is probably in the running.

Measuring a profit can be a complicated thing my accounting friends tell me. For example, Google, which controls Android, is certainly making money from it, but how much? But, what if you’re making $444 million from Android and you actually didn’t have to spend any money on research and development or programming? You’d be doing great wouldn’t you? Well, welcome to Microsoft’s business plan for Android.

According to a Goldman Sachs‘ tech analyst note, as reported by Business Insider, that’s exactly how Microsoft is cashing in on Android. Goldman Sachs estimates that Microsoft will pick up $444-million in revenue from its Android patent deals for fiscal year 2012. For those of you playing at home, that’s $3-$6 per Android device. Yes, that may well be more than Microsoft makes from its own troubled mobile operating systems.

That’s nice work if you can get it. We still don’t know exactly how much Microsoft is getting from its cross-licensing patent deals with Samsung and other Android manufacturers. We don’t even know what patents Microsoft is being paid for.

Of the big Android device makers, only Motorola, which is being bought by Google, hasn’t paid Microsoft off yet. Microsoft is well aware of this. In a salvo in the Microsoft/Motorola patent war, Brad Smith and Horacio Gutierrez, Microsoft’s General Counsel & Deputy General Counsel, blogged, “Motorola Mobility [is] the only major Android smartphone manufacturer in the U.S. without a license.â€

Considering that Google is buying Motorola Mobility for its mobile patents, I doubt we’ll see Google/Motorola paying off Microsoft without a lot of courtroom fighting. After all, a Google spokesperson responded to news of the Samsung deal by saying, “This is the same tactic we’ve seen time and again from Microsoft. Failing to succeed in the smartphone market, they are resorting to legal measures to extort profit from others’ achievements and hinder the pace of innovation. We remain focused on building new technology and supporting Android partners.â€

Yes, there’s no love lost here!

Enjoy your Android profits while you can Microsoft, I foresee legal costs eating into your profit margin, no matter how you measure them, in the years to come.

Google Says Microsoft Extorting Cash From Android OEMs - Linux and Open Source - News & Reviews - eWeek.com

Microsoft inks a deal with Samsung, which doesn't believe Google can provide it adequate patent protection. Motorola Mobility is the last major Android OEM to hold out.

Google (NASADAQ:GOOG) accused Microsoft (NASDAQ:MSFT) of extortion after the software giant inked a cross-licensing deal with Samsung, which agreed to pay Microsoft undisclosed fees for every Android smartphone and tablet it ships.

Samsung joined HTC as the second major Android OEM to settle with Microsoft to head off prolonged patent infringement litigation.

Brad Smith and Horacio Gutierrez, Microsoft's general counsel and deputy general counsel, drove home this point in a blog post announcing the pact Sept. 28: "Today's agreement with Samsung means that the top two Android handset manufacturers in the United States have now acquired licenses to Microsoft's patent portfolio."

Indeed, Samsung and HTC accounted for over half of Android U.S. smartphone sales. Naturally, the licensing deal is a huge coup for Microsoft, and a blow to Google, which didn't veil its anger at the situation.

"This is the same tactic we've seen time and again from Microsoft. Failing to succeed in the smartphone market, they are resorting to legal measures to extort profit from others' achievements and hinder the pace of innovation," a Google spokesperson told eWEEK. "We remain focused on building new technology and supporting Android partners."

The use of the word "extort" underlines the frustration building within Google. The company has watched its open-source operating system grow from living on a single T-Mobile smartphone in 2008 to appear on smartphones, tablets, TVs and peripherals from dozens of hardware and software partners. Android is currently the leading smartphone platform worldwide.

Samsung is the largest Android OEM worldwide. The company last week revealed it sold more than 10 million Galaxy S II smartphones without major U.S. penetration in less than six months. Samsung also sells the Galaxy Tab 10.1 and 8.9 tablets, several Android-based Web devices and TVs fitted with the Android-based Google TV service.

Now, each time Samsung sells an Android device, some of that money goes to Google rival Microsoft, whose own Windows Phone 7 platform is woefully behind in the market.

However, it is important to remember that Android grew smartphone share from zero to 40 percent in three years, taking massive amounts of market share from both Nokia and RIM all over the world.

Moreover, Microsoft's Smith and Gutierrez acknowledged that the company's agreement with Samsung opens the door to the OEM possible building Windows Phone handsets: "The agreement also gives both companies greater patent coverage relating to each other's technologies, and opens the door to a deeper partnership in the development of new phones for the Windows Phone platform."

Motorola Mobility (NYSE:MMI) is the third and final major Android OEM with which Microsoft seeking a licensing agreement. Seeking patent protection of its own for Android and other businesses, Google is trying to acquire Motorola Mobility for $12.5 billion.

That deal may well pass muster with the Justice Department's antitrust division, which is reviewing the deal. But if Google were to buy Motorola it would assume the patent infringement missile Microsoft has lobbed at the phone maker.

And Microsoft's lawyers are also positioning the signing of licensing agreements with the two Android OEMs as precedent that Google should pay be prepared to pay: "If industry leaders such as Samsung and HTC can enter into these agreements, doesn’t this provide a clear path forward?"

With Oracle (NASDAQ:ORCL) already making a strong case in court to command licensing fees from Google over the use of Java in Android, Microsoft could then come from the other side and squeeze Google.

 

[m-jeri]

All is fair in business i guess.

 

[Pat]

I am willing to bet that Microsoft is now making more money from Android than Google itself!

 

[paarkhi]

Patents!! My dear friends, Patents!! but soon it may change if they reconsider the Patent Laws

 

[pr0ing]

Microsoft is not making money off of Android, its making money from the enormous amount of patents that they hold which have been used in Android. They have spent a lot on R&D and this is their reward for that.

This is not similar to patent trolling and almost everyone seems to be fine with paying up royalties, except Motorola.

 

[vivek.krishnan]

almost everyone seems to be fine with paying up royalties, except Motorola.

Let google enter the battle, and the battle might change, with almost nobody paying up royalties.

 

[techie_007]

Microsoft is not making money off of Android, its making money from the enormous amount of patents that they hold which have been used in Android. They have spent a lot on R&D and this is their reward for that.

This is not similar to patent trolling and almost everyone seems to be fine with paying up royalties, except Motorola.

The thing is, while you may be right, MS hasn't proven that those parents have been used in android! By the way, they even refuse to say which particular parents are being violated without signing an NDA first

And of course, most companies like samsung have existing relationships with MS that they don't want to risk, or not deep enough pockets to fight them on their own.

It'll probably come down to Google to fight then in court.

NOTE: knowing that Google will surely fight them may be why they haven't tried extorting google directly, yet

 

[Supra]

Even in economic slowdown the lawyers have had always a gala time in US ...totally retarded patent laws which is really archaic and needs changes

 

[pr0ing]

Let google enter the battle, and the battle might change, with almost nobody paying up royalties.

Samsung is happy with paying up and they surely have gained something out of that agreement. If Google decides to fight it will be for themselves (Motorola) only. Since Android is open source, Google does not have to defend other companies using Android as per their agreements.

According to Microsoft Android uses technology for which they hold patents, FAT being one of the many. This agreement with Samsung is being used as a warning to Google/Motorola and other companies who they might be having "negotiations" with.

I am not advocating for Microsoft but this behaviour is much better than suing and outright banning of sales and public fights which Apple seems to favour.

 

[vivek.krishnan]

Samsung is happy with paying up and they surely have gained something out of that agreement. If Google decides to fight it will be for themselves (Motorola) only. Since Android is open source, Google does not have to defend other companies using Android as per their agreements.

According to Microsoft Android uses technology for which they hold patents, FAT being one of the many. This agreement with Samsung is being used as a warning to Google/Motorola and other companies who they might be having "negotiations" with.

I am not advocating for Microsoft but this behaviour is much better than suing and outright banning of sales and public fights which Apple seems to favour.

But we, as the end consumer have to bear the cost of that extra royalty. And yes, its much better than the court suing, as some part goes to the lawyers. However, keeping it under NDA is what is irksome.

In the end, feel Apple needs to be cut down to size. and intel needs to open up lightpeak so that all high end gpu's can support for it, and tell apple to keep their distance.

 

[Compiler]

Microsoft is not making money off of Android, its making money from the enormous amount of patents that they hold which have been used in Android. They have spent a lot on R&D and this is their reward for that.

This is not similar to patent trolling and almost everyone seems to be fine with paying up royalties, except Motorola.

Would be great if you elaborate some of them.

 

[avi]

MS already giving hard time for Linux Community by making Win 8 mobo specific [some boot loader shit] and now this :no:

 

[pr0ing]

Would be great if you elaborate some of them.

Members have already mentioned that Microsoft has not made that information public. I have mentioned in my next post about the FAT filesystem usage which might be one of those. MS have already used that earlier. That is all I can find ATM.

 

[RD274]

And you think Samsung and HTC don't realise whats happening right here? Samsung and HTC aren't stupid enough to give money off to Microsoft unless it was for a really good reason. Or maybe MS invented mind control.

In that case MS = ....

Spoiler

 

[viralbug]

Microsoft are these really big dudes who know how to get their stuff done. They rule the PC hardware world and now smartly getting their way through in the mobile business. At the end of the day all that matters is how much $$ they are earning.

As for Samsung, they seriously have absolutely nothing to worry about. They practically manufacture and supply most of the main hardware components of a phone! Either way is good for them. And just take a look at their lineup. They have all different OSes running on their phones.

 

[avi]

If it is was Apple...

a thunderstorm would have arised from fandroids :|

 

[Sandy]

Even in economic slowdown the lawyers have had always a gala time in US ...totally retarded patent laws which is really archaic and needs changes

Lawyers and doctors make money no matter what happens :rofl:

 

[vivek.krishnan]

And you think Samsung and HTC don't realise whats happening right here? Samsung and HTC aren't stupid enough to give money off to Microsoft unless it was for a really good reason. Or maybe MS invented mind control.

In that case MS = ....

Spoiler

No, it cannot be! Yuri is alive?

Try to remember the starting of RA2.

Imagine that Yuri is in MS HQ and makes a call to the Samsung fab plants and orders them to destroy all their stuff! EPIC!

 

[hA1d3R]

what i have heard is that they have asked HTC ,Acer and Samsung to sell the same no. of windows mobile handset as android