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Microsoft will be happy to hear that Google is to keep Android free

Summary: Microsoft CEO Steve Ballmer: ’Android has a patent fee. It’s not like Android’s free. You do have to license patents.’

Adrian Kingsley-Hughes

By for Hardware 2.0 |

During a tour of South Korea, Google's Executive Chairman Eric Schmidt said the company is committed to offering the Android operating system for free to handset partners. Microsoft will sure appreciate that.

While Google makes nothing from Android directly, it makes a lot of money, about $2.5 billion a year, from pushing ads to Android-enabled devices. And that $2.5 billion is expected to double over the next 12 months, so it's in Google's interest to keep Android free for handset partners.

But Google isn't the only company making money from Android. Microsoft is making money from Android too. The Redmond giant has entered into numerous patent licensing agreements with Android handset makers and is rumored to be pulling in some $3 to $6 per Android device sold. Last year Android was worth $444 million to Microsoft, and this number is set to grow as more patent deals are signed and more Android devices are sold. It's not big money, but it's still a significant cash cow for Microsoft that needs little in the way of care and feeding. Someone else needs to do the selling, Microsoft jsut sits back and waits for the royalty checks to roll in.

Microsoft CEO Steve Ballmer takes a different view of Google on the subject of Android being free:

’Android has a patent fee. It’s not like Android’s free. You do have to license patents.’

And Microsoft has every intention of collecting on these patents. Next in its sights is Chinese telecoms giant Huawei.

So, it's not just going to be handset makers that are happy to hear that Google is committed to keeping Android free, Microsoft is also pleased to hear that.

Related:

Topics: Android, Google, Microsoft

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38 comments
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  • RE: Microsoft will be happy to hear that Google is to keep Android free

    You know I think Microsoft will be happier if Google charges for Android . It will be much easier suing Google directly than going around knocking on everyone else's door ,collecting licence fees.
    g@...
    Reply Vote

    • RE: Microsoft will be happy to hear that Google is to keep Android free

      @g@...
      Notice that they're not suing anyone yet. They are strongarming people into licensing with the threat of suing, although I think in a lot of cases, it's been an arrangement that saw some marketing money flow to the company to market/support Windows Phones, too. Microsoft would not be interested in suing Google because Google has enough money that they wouldn't need to make a deal, while the equipment manufacturers will not put up a fight. BTW, it's easy to give away for free what cost you only an incremental effort to develop because you could use what others did for you. And it's by no means unreasonable for those parties to ask for compensation for their work.
      WebSiteManager
      Reply Vote

      • RE: Microsoft will be happy to hear that Google is to keep Android free

        @WebSiteManager: So what did MS do for Google?
        Natanael_L
        Reply Vote

  • Software patents are a crock

    Microsoft should be ashamed of themselves.
    symbolset
    Reply Vote

    • Google should be ashamed of themselves

      @symbolset
      stealing other's patents to use in their own software, not splitting the profits with the IP owners.
      William Farrell
      Reply Vote

      • RE: Microsoft will be happy to hear that Google is to keep Android free

        @William Farrell :: what patents??? MS seem too scared to publish which ones are affected.
        deaf_e_kate
        Reply Vote

      • RE: Microsoft will be happy to hear that Google is to keep Android free

        @deaf_e_kate
        People call Apple fans blind because even though Apple told you exactly what they sold and for what price, because people thought there were better value for the money. I wonder what you call someone like William Farrell who is willing to accuse other of "stealing" due to violations of patents no one can name.
        anono
        Reply Vote

      • deaf_e_kate: You can be sure that, Google and the smartphone makers know

        full-well what those violated patents are. You may not know what they are, but, if you were to manufacture your own smartphone and sell it to others using Android, Microsoft would let you know exactly what the patents are that you violated.
        adornoe
        Reply Vote

      • RE: Microsoft will be happy to hear that Google is to keep Android free

        @William Farrell: Infringement is by definition not theft. Also, I et it's mostly crap patents like the FAT patent (how to store filenames longer than 8:3, as if there's any value in Microsoft's solution beyond having one standard method).
        Natanael_L
        Reply Vote

    • Re: Microsoft should be ashamed of themselves

      adornoe@... "You can be sure that, Google and the smartphone makers know full-well what those violated patents are."

      No, they don't. Nobody knows outside Microsoft. And they make people sign confidentiality agreements before they will even discuss the issue. Because if anybody knows, why don't they say so? It's in nobody's interest (except Microsoft's) to keep those patents secret.

      Because, you see, that's not how patents are supposed to work--you only get the patent after you agree to <B>publish</B> the details of the invention. How is it you can get to have your cake and eat it too--you get to enjoy the patent monopoly, yet nobody gets to find out exactly what it is you've got the monopoly on?
      ldo17
      Reply Vote

      • Don't be silly!

        Nobody is going to be paying millions of dollars, maybe tens of millions of dollars, to Microsoft if they didn't understand that Microsoft did, in fact, have real patents that were being violated. Agreements to pay don't just happen as blackmail or threats. There are real grounds for those multi-million dollar lawsuits. Paying way over $500 million dollars in patent fees that are not warranted, is a lot more expensive than paying a "few" million dollars to lawyers to battle Microsoft. If those companies that are paying the "fees" to Microsoft were not in violation of the patents, then I'm pretty sure that, they would have fought Microsoft in court and won. If Microsoft could just make a threat about an unknown patent, then they could get away with doing that much more often, and would end up getting many billions and not just millions. In fact, the threat of lawsuits could be used by many other large corporations in order to extract payments, if they knew that, just the threats would bring them riches. In fact, those kind of threats could be used to make some companies go out of business.

        Your argument is silly and asinine.
        adornoe
        Reply Vote

      • Re: Re: Microsoft should be ashamed of themselves

        adornoe@... "Nobody is going to be paying millions of dollars, maybe tens of millions of dollars, to Microsoft if they didn't understand that Microsoft did, in fact, have real patents that were being violated."

        Nobody <B>has</B> agreed to pay "millions of dollars, maybe tens of milions of dollars, to Microsoft". All the out-of-court patent settlements so far have been for relatively small amounts, say 6-7 figures at most. Any more than that, and it becomes worthwhile for the picked-on company to push back, and call Microsoft's bluff to take it to court.

        Which some are already doing.
        ldo17
        Reply Vote

      • ldo17: You're still being silly...

        and, when Microsoft is making more than $500 million dollars a year on fees from Android patent violations, the amounts to each "violator' are not trivial. Even if the figures were to be in the 6 figure range, that money is not trivial. Besides, what's trivial now could grow to "major", when a manufacturer that uses Android grows in the number of device deliveries.
        adornoe
        Reply Vote

      • Re: Re: Re: Microsoft should be ashamed of themselves

        @adornoe@... $500 million a year is peanuts to a company the size of Microsoft. Particularly when you add on the business they're losing by putting off customers with their protection-racket tactics.

        And in case you haven't been keeping up with the news, Barnes & Noble is calling Microsoft's bluff: show us the patents, or shut up.
        ldo17
        Reply Vote

  • Why are we doing this?

    Microsoft shareholders should ask whether the company is making anywhere near the money on Windows Phone that it's pulling in via these Android licensing fees. As you note, it costs Microsoft next to nothing to acquire these fees... certainly nothing like the money being spent on Windows Phone, including the billion spent to entice Nokia into the WP camp.
    Robert Hahn
    Reply Vote

    • Are you really that dense? You dont see MS making making far more with WP?

      Not from their cut of the app store? Not from the Bing search share WP pushes. Not from the for pay services they offer on it? They have tons of ways to monetize WP. They woundnt be spending money on building and marketing it without plenty of ways to ensure very high margins. I'm sure they plan to make far more per month off each WP than they're getting as a one time payment for android.
      Johnny Vegas
      Reply Vote

      • Fandango

        <ul><i>I'm sure they plan to make far more per month off each WP</i></ul><p>Do let us know when something starts to come of those plans. They've been out there for a year and all we've seen is a slow drop in market share. Success is always right around the corner: Tango, Mango, Gringo, Bingo.
        Robert Hahn
        Reply Vote

    • RE: Microsoft will be happy to hear that Google is to keep Android free

      @Robert Hahn
      Windows Phone is not a single product. It's an important part of an ecosystem. The ecosystem makes them boatloads, and WP will stay.
      WebSiteManager
      Reply Vote

  • Android has a patent fee...

    ...because Steve Ballmer say it does. Which patents are involved is a confidential trade secret (otherwise, Google might figure out how to work around the patents).
    John L. Ries
    Reply Vote

    • That's silly...

      Microsoft collects more than $500 million a year from patent fees against Android, and you believe that, Google and the smartphone makers are just willingly going to be giving Microsoft all that money without investigating what the violations are?

      If things were as simple as that, what would stop other large corporations from making similar claims against Android, and collecting patent fees, no questions asked.
      adornoe
      Reply Vote
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