Google’s Android Is Microsoft’s New Cash Cow

Google spends millions of dollars in developing open source Android operating system and gives it to mobile device manufactures for free of cost. Majority of the popular mobile manufactures like Samsung, Motorola, HTC, etc. are releasing Android based mobile phones and touch pads without paying a single cent to Google. But they are all going to pay Microsoft anywhere between $5 to $15 for every Android device they sell!

What? Google gives it’s operating system to manufacturers at free of cost and manufactures should pay Microsoft? Are you crazy?


It may sound crazy, but reality is many Android device manufactures are already paying royalties to Microsoft as part of a patent licensing arrangement. HTC pays around $5 for every Android device it sells and other manufactures like Onkyo, Wistron are paying unspecified amount. Microsoft recently asked Samsung to pay $15 per Android device and dragged Barnes & Nobles to court for extracting royalties.

To put the royalty fees amount in perceptive – Samsung sold around 3 million Galaxy S 2 Android in the first two months of it’s launch. If Samsung has to pay royalties to Microsoft then they should pay $45 millions for the first two months sales. That’s just from one manufacturer. What would be bank balance of Microsoft if every Android device maker starts paying royalties?

Around the world over 500K Android devices are activated every day and by 2015 Android is expected to capture around 40% of mobile operating market share. If Microsoft succeeds at court and convinces/forces every Android device manufacture to pay royalties, then Google’s Android is going to the new cash cow of Microsoft.

Is Microsoft Really Just Behind Money On Android Patents?

Microsoft loves to fill their bank accounts with royalties of every Android device sold around the world, but they are not just behind money. Microsoft want to tell manufacturers that Android is not a free OS. One of the reasons manufactures choose Android over Windows Phone 7 or any other paid OS is because Android is free. When Microsoft forces everyone to pay royalties, the free tag on Android will be replaced with an uncertain amount demanded by Microsoft for patents.

When Android is not available at free of cost then manufactures tries to evaluate Android against the other paid operating systems like Windows Phone 7 and choose the one which fits better of their needs. This way Microsoft gets a way to push it’s Windows Phone 7 into market.

Why Microsoft Is Not Suing Google?

Why not Microsoft directly attack the Google instead of manufactures who use Google’s OS?To answer this question I quote PCWorld 

In the technology industry, device manufacturers are the point in the chain of commerce at which steps are taken to clear third party patent rights. The Android platform infringes a number of Microsoft’s patents, and companies shipping Android devices must respect our intellectual property rights.

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