Microsoft reportedly demanding $15 per Android phone from Samsung

[lothar]

Microsoft and Samsung reportedly are in discussions over licensing fees concerning the latter's Android smartphones. Reuters, citing "local media," reported that Microsoft was "demanding" $15 per smartphone. Samsung reportedly countered with $10 per phone in exchange for "a deeper alliance with Microsoft for the U.S. company's Windows platform."
And thus the world continues to work as it's intended to. It's important to note that just as when HTC started forking over licensing fees to Microsoft, we're talking Microsoft and Samsung here, not Microsoft and Google, or Microsoft and Android. OK, maybe indirectly. But there are countless lines of proprietary code in Android, and any number of ways that code -- or, yes, possibly code from the Android Open Source Project itself -- could infringe on another company's patents. Problem right now is that nobody's saying which toes are getting stepped on, just that there's pressure on the foot.

http://www.androidcentral.com/microsoft-reportedly-demanding-15-android-phone-samsung

Microsoft Corp has demanded that Samsung Electronics Co Ltd pay $15 for each smartphone handset it makes based on Google Inc's Android operating system as the software giant has a wide range of patents used in the mobile platform, local media reported on Wednesday.
Samsung would likely seek to lower the payment to about $10 in exchange for a deeper alliance with Microsoft for the U.S. company's Windows platform, the Maeil Business Newspaper quoted unnamed industry officials as saying.
Samsung had no immediate comment.
In April last year, Microsoft said it had reached a licensing deal with Taiwan's HTC Corp, under which it would receive royalty payments on its handsets running Android.
The move comes as Android phones gain in popularity. Microsoft charges handset makers such as HTC and Samsung to use its Windows mobile software and has tied up with Nokia to challenge Google and Apple Inc in the smartphone market.
Analysts forecast Samsung, the world's No.2 handset maker, to have sold about 19 million smartphones in the April-June quarter, with the dominant position running on Android. It is widely expected to emerge as the No.1 smartphone maker, replacing Nokia's more than 10-year reign.
Samsung's Galaxy S II, successor to its flagship Galaxy S smartphone, which runs on the Android platform, has sold more than 3 million units since its debut in late April.

http://www.reuters.com/article/2011/07/06/us-samsung-microsoft-idUSTRE7651DB20110706

The slow death of Android begins?
Will Android become the next "RIMM"?

$15/phone x 10 million Galaxy S phones sold in 2010
$15/phone x 3 million Galaxy S2 phones sold in the first 2-3 months of 2011 according to recent reports that states it's the fastest selling phone so far.

That is a lot of money. There are reports that Microsoft makes more money on Android HTC sets than it does on WP7.
First HTC and now Samsung. I wonder who's next, Motorola? LG? Sony Ericsson? Huwaei? Which other manufacturers have I missed?
I expect the cut throat nature of Android manufacturers to tighten, which will slowdown the growth of Android. Motorola barely makes enough profit margin on Android despite all the millions of sales from Verizon's "DROID" branded phones. They will go back in the red and possibly bankrupt if they have to pay a $15/phone fee. Or maybe they will switch to WP7 like Nokia or just develop their own.

 

[AstroManLuca]

Why would MS demand money from Samsung for Android phones? Some sort of patent or copyright dispute? The article doesn't make it very clear.

It sounds like MS wants to go after Android for infringing on their patents, but they're too afraid to go after Google directly so they're attacking the handset makers instead. Sort of like how Apple went after HTC for basically the same reason.

Oh well, business as usual in giant corporationland. I'm sure all the executives and their lawyers will walk away with more money than most of us will make in a lifetime.

 

[Mopetar]

It sounds like MS wants to go after Android for infringing on their patents, but they're too afraid to go after Google directly so they're attacking the handset makers instead. Sort of like how Apple went after HTC for basically the same reason.

Google doesn't charge anything for Android, nor do they make their own phones. It would be a lot more difficult to sue them, especially because they're more likely to remove the infringing parts of code once they know what they are. It's much easier to go after the handset manufacturers.

 

[theeedude]

Anti-trust authorities need to step in and force a reasonably priced license.

 

[lothar]

Why would MS demand money from Samsung for Android phones? Some sort of patent or copyright dispute? The article doesn't make it very clear.

It sounds like MS wants to go after Android for infringing on their patents, but they're too afraid to go after Google directly so they're attacking the handset makers instead. Sort of like how Apple went after HTC for basically the same reason.

Oh well, business as usual in giant corporationland. I'm sure all the executives and their lawyers will walk away with more money than most of us will make in a lifetime.

Microsoft says Android violates several of their patents.

Google is immune.
There's no need to go after them because Google doesn't charge for an Android license or sell any android products.
Besides, If they tried to I'm pretty sure they will be beaten by the FTC and the Justice Department anti-trust regulators.

It makes more sense to go after the manufacturers first, then Google, than for them to sue Google and give Google the ability to get a settlement covering all Android handset makers or simply remove the offending code.
More $$$. They are also more likely to be successful because the handset makers can do any retaliation or file a counter suit against them. What will HTC sue Microsoft for? What products or patent does HTC have that Microsoft needs/uses?

 

[AstroManLuca]

So why can't Samsung, Motorola, et al. just say "we're using an open source product as it was given to us, we didn't write the code, we didn't have any hand in its coding, we wouldn't have any idea if parts of Android violate MS patents because we didn't write it"? At worst MS could sue them for TouchWiz violating MS patents, but the Android OS itself isn't Samsung's so how can MS go after them for it?

 

[badb0y]

So why can't Samsung, Motorola, et al. just say "we're using an open source product as it was given to us, we didn't write the code, we didn't have any hand in its coding, we wouldn't have any idea if parts of Android violate MS patents because we didn't write it"? At worst MS could sue them for TouchWiz violating MS patents, but the Android OS itself isn't Samsung's so how can MS go after them for it?

Maybe because they make money off of it.

 

[Mopetar]

So why can't Samsung, Motorola, et al. just say "we're using an open source product as it was given to us, we didn't write the code, we didn't have any hand in its coding, we wouldn't have any idea if parts of Android violate MS patents because we didn't write it"? At worst MS could sue them for TouchWiz violating MS patents, but the Android OS itself isn't Samsung's so how can MS go after them for it?

For much the same reason I can't publish a John Grisham novel and claim that it's just some text that was given to me, I didn't write it, didn't have any part in writing it, and wouldn't have any idea if it happened to plagiarize parts of some other author because I didn't write it.

Samsung are the ones who are distributing that code to end users. Where they got it is irrelevant.

 

[lothar]

So why can't Samsung, Motorola, et al. just say "we're using an open source product as it was given to us, we didn't write the code, we didn't have any hand in its coding, we wouldn't have any idea if parts of Android violate MS patents because we didn't write it"? At worst MS could sue them for TouchWiz violating MS patents, but the Android OS itself isn't Samsung's so how can MS go after them for it?

Because it's better for Samsung to pay $100-150 million/yr in licensing costs than for Microsoft to sue them and have to cough up Billions(the "B" is capitalized for emphasis).
If they could, no doubt they would have.

I believe Motorola is the one in court so far because they've refused(and largely so because with those license fees, they would be losing money on Android). Remember that Motorola was in the red for years until they were bailed out by Verizon's DROID branding. That's why Motorola has been Verizon's red-headed step child.

 

[lothar]

Anti-trust authorities need to step in and force a reasonably priced license.

What in your opinion do you feel is a reasonably priced license?
Anti-trust regulators won't step in. WP7 only has a 2% market share. If you include Windows Mobile, that still about 7-8% total market share for both versus 26% for iOS, 37% for Android. I lost track of RIMM. I think they have somewhere around 13-22% market share.

 

[theeedude]

What in your opinion do you feel is a reasonably priced license?
Anti-trust regulators won't step in. WP7 only has a 2% market share. If you include Windows Mobile, that still about 7-8% total market share for both versus 26% for iOS, 37% for Android. I lost track of RIMM. I think they have somewhere around 13-22% market share.

$5 tops.
Anti-trust regulators can step in and force a mandatory license. A patent is by definition a monopoly.

 

[lothar]

$5 tops.
Anti-trust regulators can step in and force a mandatory license. A patent is by definition a monopoly.

How did Apple and RIMM do it without violating them if Microsoft's patents are a monopoly as you claim?

 

[theeedude]

How did Apple and RIMM do it without violating them if Microsoft's patents are a monopoly as you claim?

Just because they haven't been sued for it doesn't mean they didn't use those patents. Maybe they have licensing agreements in place. Patent is, by definition, a government granted monopoly. Compulsory licensing is nothing new and it has been applied to companies that aren't monopolies in terms of market share.

 

[Pliablemoose]

RIM was nearly destroyed by this kind of stuff

http://www.techdirt.com/articles/20060303/1446243.shtml

 

[theeedude]

Patent system is broken. It punishes people who actually make ideas into workable products and rewards those who simply go to the patent office to stake out broad "ideas."

 

[annomander]

$5 tops.
Anti-trust regulators can step in and force a mandatory license. A patent is by definition a monopoly.

hmmm, in the Nokia vs Apple case when Apple wouldn't agree to license as they felt that nokia was asking for larger payment then they did for other manufacturers, many many were in favour of Nokia.

Why change now its Android on the receiving end

 

[lothar]

hmmm, in the Nokia vs Apple case when Apple wouldn't agree to license as they felt that nokia was asking for larger payment then they did for other manufacturers, many many were in favour of Nokia.

Why change now its Android on the receiving end

You registered a new account just to post that?
Are you a Microsoft/Apple shill or bot by any chance?

 

[WelshBloke]

Funny that even with this Android is more popular with handset makers than WP7.

 

[Pliablemoose]

From what I'm reading, Android is a lawsuit magnet, and we haven't seen anything yet.

 

[WelshBloke]

From what I'm reading, Android is a lawsuit magnet, and we haven't seen anything yet.

Problem is Microsoft is going to have to end up suing the very people it wants to make its own handsets if it wants to play hardball.

 

[Pliablemoose]

Problem is Microsoft is going to have to end up suing the very people it wants to make its own handsets if it wants to play hardball.

I don't think Microsoft really cares. They have Nokia .

 

[WelshBloke]

I don't think Microsoft really cares. They have Nokia .

I doubt Microsoft want to rely on one handset manufacturer.

 

[Pliablemoose]

I doubt Microsoft want to rely on one handset manufacturer.

By your logic, no one else will now do buisness with them...

 

[Puddle Jumper]

I don't think Microsoft really cares. They have Nokia .

So basically Microsoft is betting that pairing their failure of an OS with a rapidly declining manufacturer will somehow result in a win?

I honestly don't see what nokia brings to the table. Even their highest end phones have hardware that would be more at home in 2009 than 2011 and they don't have any exclusive components like Super Amoled either.

 

[WelshBloke]

By your logic, no one else will now do buisness with them...