Redmond-based Microsoft Corporation has demanded that Samsung Electronics pay the company $15 per smartphone handset it manufactures for using a wide variety of Microsoft’s patents on its “mobile platform”.
The news comes from Reuters, one of the most trusted news agencies in the world. The reporter cites the Maeil Business Newspaper which, in turn, quotes “unnamed industry officials”.
The demand is reportedly based on how some of the technology used in Samsung’s mobile platform (probably Android smartphones) are covered by Microsoft’s software patents. Samsung is expected to negotiate with Microsoft to lower the deal to $10 or so in exchange for deeper integration with Redmond’s growing Windows Phone 7 platform.
Microsoft Corp has demanded that Samsung Electronics Co Ltd pay $15 for each smartphone handset it makes based on Google Inc’s Android operating system as the U.S. software giant has a wide range of patents used in the mobile platform, local media reported on Wednesday.
Samsung would likely seek to lower the payment to about $10 in exchange for a deeper alliance with Microsoft for the U.S. company’s Windows platform , the Maeil Business Newspaper quoted unnamed industry officials as saying.
Microsoft previously struck a deal with Taiwanese smartphone manufacturing company HTC for the same reasons: “intellectual property infringement” which basically means using technology that Microsoft has already patented.
Oliver wrote an excellent post on how, believe it or not, Microsoft actually makes five times more money from Android than from its own Windows Phone 7 platform.
HTC reportedly pays Microsoft $5 per handset it ships. For 30 million shipped units, that’s a smooth $150 million added to MS’ piggy-bank back in April.
Microsoft has a good history with striking licensing deals, so we’d wager on a MS-Samsung deal being struck in the future as well.
Samsung is having a pretty good time these days. Their recently launched Galaxy SII superphone, which received universal acclaim, sold around 3 million units in just under 60 days to become the company’s fastest selling phone which is 2 Galaxy SII phones sold every 3 seconds. Samsung is all set to dethrone Nokia as the world’s largest smartphone maker soon, ending the Finnish company’s 14-year long reign at the top.
Samsung hasn’t commented so far on Microsoft’s demand. They are probably caught off guard since the company is already fighting a case with Apple based on alleged hardware and software infringements.