LG, maker of the Optimus 2X and Optimus 3D, has agreed to a licensing fee with Microsoft for every Android device sold by the Korean company. Other Android manufacturers such as HTC, Samsung, and Acer have agreed to similar deals with the software giant.
Unfortunately, the details of the deal are pretty sketchy for now. We’re not sure how much LG will be paying Microsoft or if it applies to all Android devices sold across the globe. Regardless, it seems Microsoft will be making money off of more than 70% of Android devices sold in the US. Android is the dominant mobile platform in the US.
Microsoft announced, “Together with our 10 previous agreements with Android and Chrome OS device manufacturers, including HTC, Samsung and Acer, this agreement with LG means that more than 70 per cent of all Android smartphones sold in the US are now receiving coverage under Microsoft’s patent portfolio.”
So what’s the difference between Microsoft and Apple when it comes to patents? Apple wages legal battles left and right against its rivals to try and ban Android products. An example is the Samsung Galaxy Tab 10.1 in Australia, which Samsung overturned. Microsoft, on the other hand, offers licensing deals instead of suing the competition.
On the second quarter of 2011, Microsoft has generated more revenue from its licensing agreement for every Android-powered HTC smartphone compared to the sales of its own Windows Phone 7-powered handsets.
Since the Taiwanese phone giant agreed to a settlement, it is paying the software giant $5 for every handset sold. According to Horace Dediu, an analyst from Asymco, if there were 1.4 million Windows Phone 7 handsets shipped in the 2nd quarter earning $15 per unit, WP7 smartphones generated $21 million for Microsoft. However, with 12 million units shipped by HTC, Microsoft made $60 million at $5 per unit.
Before you allow your jaw to drop, take note that included in this figure are Windows Phone 7 handsets manufactured by HTC. Still, it gives you an idea on how much Microsoft is making for the Taiwanese phone manufacturer.
Compared to the second quarter of 2010, HTC has increased its hold on market shares by 165.9%. With this success, it has been awarded the manufacturer of the year this 2011.
With the success of Android and HTC, it is not surprising why Microsoft has spent a large deal on its lawyers to make sure that that the licensing fee with HTC-made Android smartphones pushes through. We guess it’s easier to bank on someone else’s success these days, rather than your own.