Life's Good for Microsoft, Receives 70 Per Cent of Royalties on All Android Devices

Life's Good for Microsoft, Receives 70 Per Cent of Royalties on All Android Devices
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Microsoft Corp. and LG Electronics have struck a deal and signed a licensing agreement

where Microsoft receives more than 70% of royalties on all LG's devices which run

the Android operating system in the US. This is another coal on the fire for the huge stake

Microsoft holds on the global Android market.

According to Microsoft's press release, the agreement entitles Microsoft to gain

royalties from LG due to the use of Microsoft technology in LG devices which consists of

smartphones, tablets and other devices which may or may not be available for consumers as

of yet. This isn't the first we hear of Microsoft striking deals with companies over licensing.

The terms and conditions of the licensing haven't yet been disclosed but LG joins a list of

other industry giants who have also signed a licensing contract to use Android and Chrome

software in their devices, whom consist of HTC, Samsung and Acer. Microsoft set up their

licensing programme in 2003, and have swooped over 1,100 deals to date.

Horacio Gutierrez in the press release:

"We are pleased to have built upon our longstanding relationship with LG to reach a

mutually beneficial agreement. Together with our 10 previous agreements with Android and

Chrome OS device manufacturers, including HTC, Samsung and Acer, this agreement with

LG means that more than 70% of all Android smartphones sold in the U.S. are now

receiving coverage under Microsoft's patent portfolio."

A similar deal last September was also finalised with South Korean electronics company

Samsung. Reports say that Microsoft demanded $15 USD per Android device but Samsung

was only willing to pay out $10 USD, the negotiation never came to fruition.

Apple has over 4,000 patents which have been signed only for them to use for proprietary

hardware and software, whereas Microsoft have signed off their licensing agreements to

allow other companies to incorporate them without the hassle of infringement. Google

lawyer, Kent Walker feels locking down patents to be utilised by one company in a large

industry hurts the market, cripples innovation and creates obstacles for other companies

trying to compete in an already very competitive market. This is a value I share and have

similar thoughts on.

It's no secret that Microsoft are trying to replace Google's mobile device OS dominance.

Microsoft's Frank Shaw used Twitter send out a provocative tweet with a link to the official

press release:

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It seems that ever since launch Microsoft and Apple have been trying to slow down the

runaway train that Android has become, reaching a global market dominance of over 50%,

a US market share of over 60% and still rising which is impressive considering Apple's 1 year

head start. Courtesy of The Guardian, the graph below shows the global market share over

an 18 month period. You can see for yourself that Google have achieved a considerable

distance between themselves and the competition and doesn't seem to be ending anytime

soon.

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We can all expect the on-going battle for smart device dominance to continue between these three corporate giants and arising IP issues in the very near future. Evidently

technology seems to be advancing quicker than it ever has before, CES and the rise in

technologies like tablets are evidence of that. As technology advances, new innovations will

be conceived which will spark further more disputes and patents in all aspects of IP's. It's

gonna be a bumpy ride.