

Microsoft: More Money from Samsung Than Skype, Windows Phone and Xbox Combined - jmngomes
http://www.gizmocrazed.com/2014/11/microsoft-income-from-samsung-android/

======
cpncrunch
This article is a badly rewritten ripoff of a much better article written two
months ago:

[https://news.ycombinator.com/item?id=8412349](https://news.ycombinator.com/item?id=8412349)

------
dredmorbius
Good and bad in this article:

Contextualizing the $1 billion in royalty payments across other business lines
is useful. Though a comparison with its net financials would be more
appropriate. Microsoft's revenues in 2014 were $86.8 billion, net income $22.1
billion.

Devices and Consumer were $37.7 billion, of which $18.8 billion were
licensing, the remainder being hardware (computer and gaming, phones, other),
and "other". Commercial revenue was $49.6 billion, with $42.0 billion in
licensing (OS desktop and server, Office, and commercial Cloud products).

[http://www.microsoft.com/investor/reports/ar14/index.html](http://www.microsoft.com/investor/reports/ar14/index.html)

So, yes, Samsung's contributing a lot in some business lines, but
comparatively little (yes, a billion dollars is comparatively little) overall.

This _does_ highlight the challenges Microsoft has had in expanding beyond its
traditional desktop and small server markets. But those markets continue to
serve the company very, very, very well.

In the "bad" category: the assumption that patents are valid and that
innovation elsewhere somehow "owes" Microsoft. The long, long history of
patents and patent abuse suggests that this _isn 't_ the case, but that a
large trove of patents is effectively a potent weapon and threat to wave
around -- its primary benefit is in being able to proclaim "not doing as we
request of you is going to prove hugely expensive to you", in a "lovely
business you've got here, it'd be a shame if anything were to happen to it"
kind of a way.

But an interesting (if still insufficiently contextualized) factoid.

~~~
higherpurpose
It's not little. Licensing is _mostly profit_ , while "hardware" is _mostly
cost_.

Remember for the first two or three Surface tries, Microsoft was _losing_
money even if it had a "billion in revenue" from them.

~~~
dredmorbius
Little from who's perspective?

For Microsoft, it's little -- and most of Microsoft's revenues are from
licensing, though principally of software.

For Samsung, with $307 billion in income and $30 billion in profits, it's
still a relatively small share of costs.

[http://www.bloomberg.com/news/2014-05-12/samsung-invests-
in-...](http://www.bloomberg.com/news/2014-05-12/samsung-invests-in-drugs-
after-outselling-apple-s-iphone.html)

------
tormeh
With lawyers like these, who needs customers?

------
bgroins
I know it's pretty popular to bash Microsoft and patent trolls, but could this
possibly be a valid and licensed use of patented technology?

~~~
ploxiln
If you're of the opinion that none of this "technology" should be generally
patentable, and Microsoft didn't go near the creation of any of the software
involved in Android (Arm device drivers for customized linux kernels? Java
ecosystem stuff? Some existing and many custom linux userspace pieces?
Cellular phone stuff?), then the situation is ridiculous.

~~~
bgroins
I suppose the difference that I see here is that Microsoft is making phones
and tablets, as opposed to patent trolls that don't even plan on leveraging
the patents they own. But yes, I agree that that probably most of these
patents should be considered too general to be considered unique inventions.
"Slide to unlock" comes to mind.

------
TazeTSchnitzel
I wonder how much of that is the VFAT patent.

------
tedunangst
> Microsoft officially revealed in a legal filing a figure of 1 billion in
> royalties that Samsung pays each year.

And right there would have been a good place to include a link with more about
this legal filing.

------
guelo
What about Apple? Do they license these smartphone patents or do they have
some other kind of deal?

~~~
Redoubts
They have a cross-licensing deal that seems to be stricter about consumer-
visible features.

[http://www.theverge.com/2012/8/13/3239977/apple-and-
microsof...](http://www.theverge.com/2012/8/13/3239977/apple-and-microsoft-
cross-license-agreement-includes-anti-cloning)

------
general_failure
What patent does ms own that makes it so pricey?

~~~
IshKebab
The list of patents was leaked:

[http://betanews.com/2014/06/17/china-leaks-2bn-of-secret-
mic...](http://betanews.com/2014/06/17/china-leaks-2bn-of-secret-microsoft-
android-patents/)

------
aarongray
This is just wrong... its a beautiful example of how messed up our patent
system is, and how it hurts tech rather helping foster it.

------
spacemanmatt
Gee, that seems pretty reasonable.

