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Microsoft adds new scalp to its Android licensee collection

April 28, 2012
steve ballmer
"[I]t's important to recognize a fundamental shift underway in our business and the areas of technology that we believe will drive the greatest opportunity in the future."

You might know that Microsoft is the owner of several important mobile-related patents, and that the Redmond giant has never been afraid to use said patents to squeeze some bucks from… well, everyone in sight. That’s the bad news.

The good news is Microsoft, unlike another iconic company, is willing to talk before shooting, although some would replace “talk” with “extort the living  daylights”. As a result, many Android manufacturers (supposedly infringing MS’ patents) have entered licensing agreements with Steve Ballmer’s company, which sees them paying a fixed amount per device sold, in exchange for some legal peace of mind. Among the notable exceptions, we have Barnes & Noble and Motorola (close to be owned by Google now), who preferred to take it to court rather than to give in to Microsoft’s demands.

On the other hand, other major Android OEMs, including the mother-of-all-Android-manufacturers, Samsung, have accepted Microsoft’s indecent proposal.

Microsoft’s chief legal head, Horacio Gutierrez has bragged that the tech mammoth now has licensing agreements covering 70% of all devices sold in the US. It looks that Microsoft can add other notch to its list, as the Taiwanese electronics maker Pegatron has announced that it settled its legal business with the software maker.

In line with the agreement, Pegatron will pay MS an undisclosed fee for every tablet, smartphone, e-reader, Chromebook, or game console it sells. Importantly, Pegatron also makes computers running Windows 7, so the Taiwanese had all the interest to maintain their good standing with MS.

With this new addition to its collection of Android licensees (which is in the dozens now), Microsoft has agreements with four out of the top five Taiwanese ODMs. Just imagine the amount of cash flowing towards MS from the bustling Taiwanese tech sector, which churns millions of devices out every week.

It’s no wonder that Microsoft is so serious about its patent peddling operation – on a side note, a few weeks ago, Microsoft agreed to buy $1 billion worth of patents from struggling web giant AOL, only to sell the same patents to Facebook (who’s engaged in an arms race to protect itself against Yahoo and others) about a week later.