

Microsoft continues to profit off Android - zacharye
http://www.bgr.com/2011/09/08/microsoft-continues-to-profit-off-android/

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anon1385
_Microsoft’s revenue from royalties HTC is forced to pay on each Android phone
it sells is estimated to be between three and five times the company’s Windows
Phone revenue, which could help explain why Microsoft has been so quiet to
date when it comes to marketing its new mobile OS_

I think the more important statistic is the profit Microsoft makes per Android
device, compared with the profit per WindowPhone device. There are far more
Android devices, so it's not surprising they make more from that "licensing"
agreement (I'm loath to call it that when it's more like extortion). I find it
hard to believe that MS would prefer (and make more money from) an Android
dominated market compared to a WP7 dominated one, so I'm pretty skeptical of
the idea that MS are holding back on WP7 because they don't mind Android
dominating. I could be wrong though, maybe their Android licences really are
that lucrative, and in that case God help us all because the software(-patent)
industry is even more fucked than most of us ever imagined.

~~~
brudgers
My take on this: Microsoft is using a free market approach to Google's dumping
of Android at a loss in exchange for manufacturer adoption.

Yes, they could try to litigate and pursue trade sanctions - but Viewsonic and
the other companies are also Microsoft customers and B2B relationships aren't
built that way. Microsoft's strategy is successful because licensing is
clearly more certain than litigation and probably cheaper as well. Given that
Microsoft leadership has a fiduciary responsibility to protect the companies
IP vigorously, their licensing program is as much of win-win solution as is
possible under the circumstances.

Determining whether or not reaffirming the cusomer-vendor relationship between
Microsoft and the major device manufacturer's is a brilliant move in the long
run, is left as an exercise for the reader.

~~~
steveb
I find it hard to reconcile the term free market with the monopoly status
granted in a patent, but this is the system we have and MS would be wrong to
not respond in this way. The goal here is to make Android uneconomic for
handset makers, not to generate revenue.

Google can dump their OS on the market because their business model is
different than Microsoft's. They make 98% of their revenue on advertising, so
it is in their interest to commoditize the OS level and increase the adoption
of internet-connected devices. MS makes virtually all their profits on the
licensing of software, they need to protect that business and their core
platforms.

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nextparadigms
I think it's embarrassing for Microsoft to make more from bogus patents than
from their own actual product. If I were them I wouldn't try to brag about it
in the press. Heck, if I were them I probably wouldn't even do it in the first
place.

This is why Microsoft have lost their way. Instead of focusing on their own
products and innovation, they try to make money through other less _honorable_
means. And sadly it runs deep into Microsoft's corporate culture.

Their actions as of late are making me reconsider whether I will want to use
any of their new products in the future. They should realize that a lot of
those Android users are also potential Microsoft customers for other products
of theirs (desktop Windows, Xbox, Office, etc). They shouldn't try to piss
them off with stuff like this, by extorting money from other of their favorite
companies, especially when the way they do it is highly questionable.

~~~
yread
> ... bogus patents ...

> ... honorable means ...

> ... extorting money ...

> ... highly questionable

Can you specify what do you mean? If the patents aren't valid, Google would
surely have them canceled, wouldn't it? If they are valid MS are paid for
their hard work or hard work somebody else did and they purchased it. Hardly
"questionable".

~~~
lukeschlather
I'm going to assume you're not trolling:

Fundamental problem with software patents today: usually it is much cheaper to
pay than to invalidate bad patents.

~~~
brudgers
It is also cheaper to pay than to try to invalidate _good_ patents. The
assumption that Microsoft's patents regarding Android are bad is an
unsupported premise, and given Microsoft's purchase of Danger and Andy Rubin's
close association with Android, their claims are meaningfully plausible on the
surface.

------
zmmmmm
It's important to note here that most of the revenue is from HTC and most of
that is not specifically from Android but from HTC Sense which is a UI layer
HTC puts on top of Android and which was actually funded in part by MS in the
first place to use with Windows Mobile - hence why they feel entitled to
royalties when it is used outside that OS.

So while it is correct to say that the money is coming from "Android phones",
it's a bit misleading to say it is coming from "Android" per se - this is a
HTC Sense / MS specific thing.

Of course there are other non-HTC-sense patents too, but they are a much
lesser part of the deal.

