Microsoft pulls in $444 million per year from Android patents

Microsoft pulls in $444 million per year from Android patents

Summary: Microsoft is expected to pull in a revenue of some $75 billion for the 2012 fiscal year, so $444 million from Android is just loose change.

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When you spending your hard-earned cash on an Android smartphone or tablet, you're actually adding a few bucks to Microsoft's massive cash haul.

According to a note from Goldman Sachs's technology analyst team, Microsoft is pulling in between $3 and $6 per Android device sold thanks to patent deals signed with companies such as Samsung and HTC. In all this works out at some $444 million per year for the Redmond giant.

Sounds like a lot, but in the grand scheme of things it's a drop in the ocean. Microsoft is expected to pull in revenue of some $75 billion for the 2012 fiscal year.

In other words, it's loose change.

Android might be a cash cow for Microsoft, but you do have to question whether the return Microsoft is making off of the patents is offsetting the damage Android is doing to Microsoft's mobile platform aspirations.

The upside for Microsoft though is that Android sales are set to soar ... so that $444 million will also grow.

Topics: Microsoft, Android, Google

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  • RE: Microsoft pulls in $444 million per year from Android patents

    And your point is...?
    willfordcr
    • RE: Microsoft pulls in $444 million per year from Android patents

      @willfordcr They have to have something that makes money ... BING sure is a loser ($9B) ... too bad the Microsoft money folks have to look to open source for help ...
      BrentRBrian
  • this is a despicable racket

    that does not even make business sense.
    the DOJ should investigate it!
    The Linux Geek
    • RE: Microsoft pulls in $444 million per year from Android patents

      @The Linux Geek
      What's wrong with the business sense?
      Darkninja962
      • Because the pigeons are denied the chance to change the code

        @Darkninja962
        MS requires an NDA before it will talk specifics. This prevents anyone telling the Linux developers which code is at issue so that it can (potentially) be modified to work around the patent. Or maybe an expert "prior art" search across the Internet could show that the patents are invalid anyway.
        Zogg
    • RE: Microsoft pulls in $444 million per year from Android patents

      @The Linux Geek
      Errm... MS owns the patents, they signed a licensing deal with the manufacturers. This is how patents are supposed to work. You invent a technology, or the concept of, patent it, then either build it yourself, or license other companies to do so on the proviso they pay you royalties from their sales.

      perhaps you'd rather they just sued people ala the fruit company?
      hazzzaa85
      • RE: Microsoft pulls in $444 million per year from Android patents

        @hazzzaa85

        Absolutely. It's how patents work. There's a few options for people that come up with great ideas and patent them. One, build your own widget and make money leveraging it against people that didn't conceive of it. Two, sell it to a company, group, or person that needs it but didn't conceive of it. Three, license it to (company, group, person) that wants to make use of it but did not conceive of it. In every scenario, the patentor makes money from an idea. The concept is simple, the system is not broken. The inventor even has rights to sue others that try to steal it. Why is this so hard for anyone to understand? Personal bias and lack of personal patents or patent experience.

        Didn't agree much with the last pointed question, though. Seemed too confrontational and biased, maybe based on past contentions of said 'fruit company' or their fanbase' history.
        TechNickle
      • RE: Microsoft pulls in $444 million per year from Android patents

        @hazzzaa85 you seem very unfamiliar with what's happened with the patent system.

        Originally, a person or small firm would spend years inventing a better threshing machine, or gin press, or mousetrap. They would patent the _entire_ device, so that a larger better funded company could not COPY it and use their greater fiscal resources to drive the inventor out of business. The inventor could then either sell his entire invention or license it to a company that wanted to manufacture it for him.

        Then we got into software patents. There's a patent on using the XOR operation 3 times in a row to invert a signed binary number. There's a patent on using the keypad on your phone to do anything except call another telephone. There's a patent on pretty much every tiny aspect of making a modern smart device of any kind, covering anything from the display, the user interface, the buttons, the case, the software the code is written in, the details of every aspect of the cpu inside the device - NONE of which represent a complete invention.

        The patent office as gone basically to the point of allowing someone to patent the process of wiping your butt from front to back, and then banning every bathroom in the world unless they license the wiping patent since it might be involved in the restroom product and allowing front-to-back wiping would be "stealing" the patent owners "IP".

        Go ahead. Explain to us what aspect of Android is "stolen" from MSFT. Be specific.
        spark555
      • RE: Microsoft pulls in $444 million per year from Android patents

        @hazzzaa85
        That's how it's supposed to work, problem is that MS is telling which of it's patents Android violates. It just tells everyone that Android violates their patents and that they better pay up or else they are gonna sue. These companies have been so beaten down by litigation that they just pay up instead of fighting. Meanwhile MS refuses to reveal what patents are being violated so that Android developers can't take out the offending code.
        It's pretty sinister and an unfortunate fact of software development these days and one that is stifling a ton of innovation. Especially innovation coming from little start ups that just don't have the kind of money needed fight this kind of competition through litigation.
        Personally I think there should be a law that if someone threatens you with patent infringement, they should be forced to disclose which patents are being violated.
        mookiemu
      • RE: Microsoft pulls in $444 million per year from Android patents

        @hazzzaa85

        The problem is that Microsoft may not even have any legitimate patent claims against Android. They say they do but when asked what patents are being violated they are loathe to tell. Patents MIGHT be being violated, but it is just the threat of litigation that is causing companies to pay up. If Microsoft is merely threatening to sue without a legitimate claim unless someone pays up, then that is extortion. Microsoft should be forced to publicly disclose which patents, if any, are being violated and if none are then someone needs to go to prison.
        animekenji
    • RE: Microsoft pulls in $444 million per year from Android patents

      @The Linux Geek : Why amI not surprised from someone who wants everything for free.
      Gisabun
  • RE: Microsoft pulls in $444 million per year from Android patents

    Not exactly chump change in my book. It's more than I expected they would make. Oracle may be licking their chops right now in seeing those numbers.
    dave95.
    • That's easy - we'd have heard about it

      @Rama.NET
      <i>"that means you know concretely that they haven't provided any example."</i>

      Linux is developed in public. If the examples had been revealed then I'd have heard about them.

      I'm not talking about the "Darl McBride" sort of examples that are only revealed if you promise not to talk to the people best qualified to evaluate them...
      Zogg
  • RE: Microsoft pulls in $444 million per year from Android patents

    Nice post Adrian.
    Return_of_the_jedi
    • It's the FAT32 filesystem that has patent problems, not FAT

      @wright_js<br><i>"There are also plenty of examples of patents that Linux/Android break, including FAT File System support</i><br><br>MS's patents regarding FAT32 are about Long File Name support. Linux can use the original FAT filesystem without paying MS a dime. And besides, Linux worked around the Long File Name problem too:<br><br><a href="http://www.geek.com/articles/chips/clever-linux-folk-find-way-around-microsoft-fat-file-system-patent-2009073/" target="_blank" rel="nofollow">http://www.geek.com/articles/chips/clever-linux-folk-find-way-around-microsoft-fat-file-system-patent-2009073/</a><br><br>I also suspect that merely reading FAT32 is fine; you only get into difficulties when writing to it.

      As for the "battery signal strength" stuff, that sounds like a fine candidate for "prior art"...
      Zogg
  • RE: Microsoft pulls in $444 million per year from Android patents

    Anyone wanna take a guess at the cost of MSFT's legal team, plus expenses per year? $200/hr x several-hundred-lawyers would eat a hundred million pretty quick...
    spark555
    • Deleted by author

      .
      Zogg
      • RE: Microsoft pulls in $444 million per year from Android patents

        @Zogg It is rather "McCarthy"-ish to insist that Android is in violation of a couple hundred patents, and then refuse to provide so much as a single example.

        I wonder if at some point someone in the justice department might look at this case (and many others - MSFT is not the only bully in the neighborhood) and explore what amounts to "protection racket" charges since the patent attacks seem to boil down to "pay us off, or we'll ruin you with endless, potentially baseless lawsuits which will cost you more to defend against (right or wrong) than what we demand for protection-money"
        spark555
      • RE: Microsoft pulls in $444 million per year from Android patents

        @spark555 & @Zogg
        that means you know concretely that they haven't provided any example. Could you please elaborate your knowings.
        Ram U
      • RE: Microsoft pulls in $444 million per year from Android patents

        @spark555<br><br>"...to insist that Android is in violation of a couple hundred patents, and then refuse to provide so much as a single example."<br><br>If only you'd have finished your sentence.<br><br>"...to the general public, instead of only the companies involved that agreed enough to come to a license agreement."

        PS - Invoking McCarthyism in a patent forum? Straw grasping, or grandstanding?
        TechNickle