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Samsung to pay royalties to Microsoft for every Android it makes, inks cross-licensing deal

Posted: , by Victor H.

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Samsung to pay royalties to Microsoft for every Android it makes, inks cross-licensing deal
Samsung will pay Microsoft royalties for every Android handset and tablet it releases, but it will also widen the collaboration with Redmond over Windows Phone devices and will go as far as participating in the marketing of the new products, Microsoft announced today. That’s a huge win for Redmond as Samsung is one of the biggest Android makers. Earlier, another major Android phone maker, HTC, signed a deal with the software giant over licensing.

Update: Korea Times seems to have dug up the financial details of the deal saying that Samsung will pay Microsoft $180 million in royalties next year.

HTC and Samsung together reportedly accounted for half of all Androids sold in the States in the last year: 

“Together with the license agreement signed last year with HTC, 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. These two companies together accounted for more than half of all Android phones sold in the U.S. over the past year. That leaves Motorola Mobility, with which Microsoft is currently in litigation, as the only major Android smartphone manufacturer in the U.S. without a license,” Microsoft’s Brad Smith and IP lawyer Horacio Gutierrez said.

This leaves Motorola as the only big phone maker that still hasn’t reached an agreement with Microsoft over its intellectual property claims for Android. What are the prospects on that? Given the fact that Microsoft had also secured a deal with ViewSonic, Acer and other not so well known companies, it seems that Android will become a key factor in Redmond’s mobile profits.

Image courtesy of Letmedefine.com.

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posted on 28 Sep 2011, 09:33 11

1. snowgator (Posts: 3188; Member since: 19 Jan 2011)


Samsung will not stop making WP products. This is great news. No wonder Pete stopped posting- he knew his "Bada will rule Samsung" theory was shot. That whole "we are gonna dump WP" ploy was just a bargining chip. I am very happy for this. WP is assured a place at the table with the big boys.

Give it a few months- I am sure Microsoft will work something out with Motorola as well. Maybe after the Google merger goes through. See Apple: These thing CAN be worked out. Really- they can.

posted on 28 Sep 2011, 09:46 1

3. protozeloz (Posts: 5369; Member since: 16 Sep 2010)


Maybe a cross license agreement and exchange of intelectual products, this may make both Os's tougher oh and an msn messenger for Android.... We need an oficial one

posted on 28 Sep 2011, 10:13 2

7. kainy (Posts: 165; Member since: 10 Aug 2011)


Yeah and we need gMaps but no luck there right? No Messenger for Android!

posted on 28 Sep 2011, 10:41

16. protozeloz (Posts: 5369; Member since: 16 Sep 2010)


There was google maps for wimo 6.5 maybe they where waiting for mango to make a new version

posted on 28 Sep 2011, 10:15 2

9. iankellogg (Posts: 155; Member since: 15 Jun 2011)


What purpose do we need a dedicated MSN messenger?

posted on 28 Sep 2011, 10:45

17. protozeloz (Posts: 5369; Member since: 16 Sep 2010)


I have my main Gmail account and my old msn account I would like to use an official app for my windows life stuff every time I need to get something from there it feels better for me. It's more like a "me" stuff

posted on 28 Sep 2011, 10:20 1

12. SoyCider (Posts: 18; Member since: 28 Sep 2011)


KakaoTalk works for me
http://www.kakao.com/talk/en
#1 free SMS (CNET)

and if you dont like this one, you can simply google other messengers xD

posted on 28 Sep 2011, 10:46

18. protozeloz (Posts: 5369; Member since: 16 Sep 2010)


I'll give this one a try, I've tried another like ebuddy tho

posted on 28 Sep 2011, 09:42 3

2. SoyCider (Posts: 18; Member since: 28 Sep 2011)


HTC pays $5 per one android handset,
imo Samsung will pay about same but a little bit less since Samsung sold A LOT more than HTC.

posted on 28 Sep 2011, 09:55 4

6. snowgator (Posts: 3188; Member since: 19 Jan 2011)


I actually heard it was more than HTC, but numbers were not released. I think keeping WP branded Samsungs on the market was a bigger concern for Microsoft.

posted on 28 Sep 2011, 10:19 4

11. corps1089 (Posts: 492; Member since: 20 Jan 2010)


Samsung countered MS' proposed $15/Android handset sold with $10/Android handset sold and partnership to develop and market WP7 phones. The final terms are not known at this time...

http://thenextweb.com/mobile/2011/09/28/microsoft-signs-its-most-important-android-patent-license-to-date-with-samsung/

posted on 28 Sep 2011, 10:29 2

15. SoyCider (Posts: 18; Member since: 28 Sep 2011)


whoa, I guess package deals doesn't apply here.
It usually works when I buy a box of Pringles instead of one. oh well. xD

one thing tho, I thought I've read a news that MS had to pay royalties to Samsung few months ago.
Does anyone know/remember what this was?
or I'm just mixed up.

posted on 28 Sep 2011, 15:21

33. corps1089 (Posts: 492; Member since: 20 Jan 2010)


I didn't hear that, it may have been news when MS started asking Samsung for a license deal for Android.

posted 6/7/11:http://www.phonearena.com/news/Microsoft-demands-15-for-every-Samsung-made-Android-smartphone_id20116

posted on 28 Sep 2011, 09:51 8

4. superguy (Posts: 269; Member since: 15 Jul 2011)


This is how infringing deals should work.

If there's infringement, work out a reasonable deal, cross license and move on.

MS just wants to make money. $5 a handset isn't going to kill it - Sammy will just raise the price by $5 which considering how much one of these costs, isn't that big of a deal.

This is much better than the Apple model of blocking products it doesn't like and compete head on with its sacred cows.

posted on 28 Sep 2011, 09:53 4

5. snowgator (Posts: 3188; Member since: 19 Jan 2011)


Very well said. :-D

posted on 28 Sep 2011, 10:17 1

10. kainy (Posts: 165; Member since: 10 Aug 2011)


Well if you look it that way ... Apple blocked Samsung in Germany and Australia if I'm not mistaken, and by the time they did that MS acquired royalties for 7 OEMs (and 8th [Motorola] is following). I don't really understand why Apple blocks Samsung .. they just make it more appealing to people, or that's what I think at least :)

posted on 28 Sep 2011, 10:23 3

13. corps1089 (Posts: 492; Member since: 20 Jan 2010)


Apple doesn't want money, it has money. They want market share and market dominance which they think they can get by preventing consumer choice and preventing any other phones from having the features that iPhones have. A respectable strategy, but it opens them up to backlash and puts a microscope on thier own practices.

Since the iPhone was not developed in a bubble and features [but maybe not patented features] from its predecessors, it makes Apple looko hypocritical...

posted on 28 Sep 2011, 11:42

22. gallitoking (Posts: 4680; Member since: 17 May 2011)


sorry but you are wrong... Apple is not after market share... having only relase one phone a year clearly shows that thats what they are not after...Samsung on the other hand wants maret share thats why they relased phone every two weeks.. is common sense.. but you are right they dont want money.. and dont want other people making money out of their products. or ideas... thats why then ban the products...

posted on 28 Sep 2011, 11:56 3

24. darth8ball (Posts: 519; Member since: 02 Aug 2011)


There is more than one way to skin a cat gallito. \
By releasing multiple devices that hit a broader spectrum of consumer.
By pure sales domination.
By taking away the other competitors in the market.
Every companies goal is to have the greatest market share but only two of the three examples I gave are ethical. Compare to a smear campaign in politics as compared by focusing on the issues.

posted on 28 Sep 2011, 12:18 1

27. gallitoking (Posts: 4680; Member since: 17 May 2011)


true... in all of those. but for some reason the fandroids think that the 3rd one is why Apple is doing this....honestly.. I dont think is the reason..but we will find out...

posted on 28 Sep 2011, 12:06

25. taz89 (Posts: 2009; Member since: 03 May 2011)


how is samsung making money off there products...no one is buying samsung device thinking its a apple device..they buy it because its a samsung device...as i have always said the only commonality between the two is that they both release streamlined design that are kept simple and nothing more...until i start reading on tech sites that people are mistakenly buying samsung products thinking its apple, i dont believe in this crap that samsung is making money out of apple...

posted on 28 Sep 2011, 12:45

28. gallitoking (Posts: 4680; Member since: 17 May 2011)


Samsung is making money out of their ideas.. thats Apple bread and butter... the hype.. the anticipation of their products.. not knowing the final product until the last minute... and by having Samsung making products based on the inside information they had.. because they supplied Apple with processor .screens.. is easy for Apple to think.. Samsung stole some ideas...so making money directly..no but indirect but having similar products in the market...

posted on 28 Sep 2011, 14:36 2

31. taz89 (Posts: 2009; Member since: 03 May 2011)


what did samsung steal a rectangle with a screen?seriously please and what inside information did they steal that you talk of...i have not read in any sites that samsung have been making products based on inside information they have on apple,lol apple the most secretive company will never share informatin with anyone...they provided apple screen guess what they have a different aspect ratio screen thats completely different tech,they provided the chip guess what they dont use the same chip...like i said they both design very simple looking products and because they keep there design plain and simple there will be some things similar...you could say the ipad looks like hd tv that samsung have made before cause thats what tablets essentially going to look like a small tv...as for the galaxy line looking like iphone...well there is a lot more difference than similarities...there is more than enough to distinguish the two...lets just cause you like someones product does not mean you have to agree with everything they do...no one ever sued in the tv industry for tvs looking the same(only cause apple was not in it) cause essentially all tvs will look the same cause all they are is screen with bezel with obviously the guts of it..the same goes with tablets...all tvs are now streamlined...i would agree with apple if samsung actually was infringing on technology but a rectangle i cannot agee..somethings just should not be trademmarked like the obvious shapes of certain products...it just seems the whole trademark and patent thing needs a big look at...if samsungs 3g patents is a standard in the phone industry then a rectangle with a screen should be a standard in the tablet market...also hype what hype is samsung creating most of there products are known about before its even announced,samsung cant help it if people are anticipating there product...are you saying that only apple products should be anticipated?

posted on 28 Sep 2011, 12:07 2

26. dacastrator (Posts: 232; Member since: 22 Sep 2011)


do you think Apple doesnt steal ideas? what do you say about that pull down notification sh*t?

posted on 28 Sep 2011, 12:47

29. gallitoking (Posts: 4680; Member since: 17 May 2011)


there are things that you can use and things that you cannot.. the notification sh*t like you call it.. if it dould hav been stolen.. like you claim... Android would have been all over this.. since they announce iOS5 was having it.. dont you think?..

posted on 28 Sep 2011, 13:34 1

30. p0rkguy (Posts: 683; Member since: 23 Nov 2010)


In other words, you're not going to care about what Apple does wrong if there isn't something actually saying Apple is doing wrong? And when an Android manufacturer does something wrong, you're to assume the best for Apple?
"Android would have been all over this.. since they announce iOS5 was having it.. dont you think?.." But since Android hasn't, Apple isn't doing wrong?

That's like having a child being picked on by the school bully but doesn't say anything since more problems will arise, then by your logic, the bully isn't doing wrong.

posted on 28 Sep 2011, 14:45 2

32. taz89 (Posts: 2009; Member since: 03 May 2011)


the reason why android/google isnt all over it is that the android source code is there for anyone to use...the notification,deny it if you want has been copied...i got no problem with that cause it will make my iphone 4 even better but apple fans and apple have double standards...forget for a moment about whats patented or not...but if you copy someone and someone copies you but then you dont like it and start crying about it,its called being a hypocrite...everyone takes ideas of each other but apparently apple have never borrowed/used other peoples idea..to apple fans everything apple does is original ...the whole of ios5 is ideas taken from other os's..theres no denying it...even apple know they took ideas of other os's and thats why they did not hype about them as they normally do about everything they do...

posted on 28 Sep 2011, 15:25

34. dacastrator (Posts: 232; Member since: 22 Sep 2011)


there you have it. i mean what they say.

posted on 28 Sep 2011, 16:47 2

35. corps1089 (Posts: 492; Member since: 20 Jan 2010)


I think that as a corporation responsible to turn a profit, Apple has done a spectacular job.

Apple's main differentiation across all hardware types is its user experience: what Apple really sells. Its fervent following is due to user experience. It is in Apple's best interest to do everything they can to protect this.

This translates into Apple wanting tight control of the user experience & hardware & software & testing. This is one reason for the iPhone product cycle.

The other reason is a result of the Apple following & a result of the cash opportunity a slow product cycle represents. Apple has a loyal consumer base & excellent marketing resulting in a huge installed base. Apple can release incremental upgrades to the iPhone at a slow pace [which every manufacturer would prefer] & consumers will still buy the newer phone even though it is not a revolutionary upgrade.

Apple can afford to offer new iPhones marginally upgraded because of the demand for their product. This demand is evidenced in unit sales, market share, high resale values, and developers flocking to iTunes to make $. Benefits of a slow product cycle are: low supply chains costs due to volume, per unit profits go up as product shelf life is extended & ROI for R&D skyrockets. Marketing Costs go down as new launch cycles push out further. Etc…

What endangers this wonderful synergy Apple built into their profit machine?
Having competitive products released by other manufacturers.

True competition to the iPhone causes issues for this model. Apple has to make competitive improvements & cannot stick to their own upgrade. To prevent losing sales, they must react to competition for their release schedule rather than set best financially profitable release schedule. If they do not react to competition, they die a slow death.

posted on 28 Sep 2011, 16:47

36. corps1089 (Posts: 492; Member since: 20 Jan 2010)


So how can Apple best prevent competition?

Have best software features:
Incorporate best of what is out there can run risk of patent infringement.
Innovating your own incurs R&D & other product cycle costs: testing, release management, etc. Apple can & does innovate, but now that so much attention [read: money] is drawn to mobile, it is much tougher to stand out.

Have best hardware features:
Hardware costs money, & you have to choose wisely like Apple’s retina display. There is not always a clear path to choosing hardware with best ROI, & there will always be lots of supply chain costs for new hardware. Risks exist for innovation [like external antennas].

Have best price points:
Why reduce your margin if you can help it? This is last resort of a failing entity [HP Touchpads], or of ultracompetitive industries like game consoles [where all hardware is sold at loss].

Have best branding
Apple has best branding. Period. And they do not seem to have to work at it due to their fan base.

Stop others from making competitive products:
Leverage partnerships to close off supply chains to competitors. Hard to do if your competitor is also your supplier.
Lobby government bodies for legislation detrimental to competitors. Hard to do if your competitor is not in the same country.

Delay & prevent sales of competitive products:
Ask ITC for product ban based on patent infringement
Sue for Patent infringement in US Court based on ISPTO rules or EU Patent rules.

Ask for license deals to raise cost of competing products using Apple IP:
Not viable option for Apple.
Apple has plenty of cash to do what they want, they need to stifle competition to maintain market dominance & cash printing machine that goes with slow product cycles. Even if they are on top but have to succumb to rapid deployment pace, they will lose a lot of money.

Where is a 4G iPhone of any flavor? Other manufacturers will have 4G phones out for 1 year before we see a 4G iPhone. Because Apple doesn’t need to incur costs associated with hardware and product cycle to still sell lots of iPhones. People bought the iPhone4 even though it is not 4G. iPhone customers allow Apple to sit back & make $ off slow product cycles. Which Apple will do, as long as customers are there, so Apple will stifle competition to keep them there.

posted on 28 Sep 2011, 10:13 5

8. SoyCider (Posts: 18; Member since: 28 Sep 2011)


What's more?
This indicates that MS will be able to focus on developing mobile Window OS as they now have access to Samsung's technology and its patents. It probably is Samsung's strategy to support multi-OS in the smartphone galore.

without a doubt, Samsung makes one powerful hardware,
and it will be a shame if only one OS (Android for now) can use the best out of it.

we, customers, will have an option to choose OS in the same device :)

posted on 28 Sep 2011, 10:28 3

14. ReturningToNokia (Posts: 130; Member since: 09 Jul 2011)


More Samsung WP devices on ALL carriers, please.

posted on 28 Sep 2011, 11:10 2

20. corporateJP (Posts: 1520; Member since: 28 Nov 2009)


Microsoft could school Apple on how to properly handle a patent issue.

Of course, Apple has janked more patents than any other manufacturer, so it wouldn't actually be reciprocal.

posted on 28 Sep 2011, 11:27

21. taz89 (Posts: 2009; Member since: 03 May 2011)


this is how things should be resolved and not acting like a child trying to ban products and reduce competition and most importantly taking choices away from consumers.

posted on 28 Sep 2011, 11:42 1

23. King85Kong (Posts: 11; Member since: 17 Sep 2011)


Good job Microsoft and Samsung. Now just release the Focus S already, and take my money. Thanks.

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