How Microsoft is Planning to Beat Android by Suing Everyone

Do you know why so many manufacturers have flocked to Android in lieu of creating their own operating systems or licensing others? There's plenty, but the key one is the platform's open source nature. The only thing that actually costs OEMs money to put Android on their phones is the optional Google services (Gmail, Google Search, Google Maps Navigation, etc.) for an undisclosed but supposedly minor amount. Not only that, but the OS really is open source meaning OEMs can transform the stock software into something wholly their own like HTC has done with Sense. Google has stuck to their promises of an "open" and "free" Android for a long time now, but the dedication to it's promise might also be its downfall...by the hand of Microsoft.

GigaOM reports on Microsoft's recent legal game in the smartphone industry; the company is throwing down lawsuits left and right to Android manufacturers. Why? Microsoft just so happens to own a lot of smartphone patents thanks to their work in Windows Mobile and it seems that they can be leveraged pretty effectively against OEMs to squeeze out some dough. How much are we talking about? HTC was one of the first and Microsoft struck them a deal of $5 per Android handset or tablet sold. Lately Microsoft hasn't been so kind, with recent reports saying they will pursue after Samsung for a huge $15 per handset sold. We don't know if you know this, but Samsung is the number two hardware manufacturer in the world meaning they sell a lot of Android products.

Any other patent troll would be doing this just to make a quick buck, however for Microsoft it's a brilliant business move. Microsoft is disincentivizing Android for manufacturers--if each Android handset costs an extra $10 - $15 to make on top of the fees for Google's services, what's the point anymore? Sure Android is already well-established in terms of sheer numbers, but Microsoft has manipulated the market so that it can actually charge manufacturers more for making Android than for making Windows Phone handsets (which cost about $15 to license). If it achieves that, Microsoft just created a huge incentive for companies to switch over from Android to Windows Phone. Even if companies don't eventually make the switch, Microsoft will still be raking in pretty huge profits thanks to these patent agreements. It's a win-win for them.

Microsoft is making a pretty bold move here and one of the most aggressive we've ever seen in the smartphone industry. It's dirty-handed and takes advantage of a broken patent system, but if they can snag Samsung even for $10/handset after negotiations, it could be the big sucker punch Microsoft needs to get Android out of the way and Windows Phone off the ground.

Via: PhoneArena
Source: GigaOM