Samsung gets closer to Microsoft
It might not be WP7 – the OS still has to prove itself to consumers, and if they are not swayed by its innovative user interface, the carriers will stick with Android rather than sacrifice sales to politics. Samsung is hedging its bets, and it would, of course, get the greatest measure of control by seeing bada become the third way. Its plans to outsource the OS (see Wireless Watch September 21 2011) carry many risks of conflicts of interest, but they reveal the Korean giant‘s desire to expand its inhouse project into a broad industry platform.
But the Galaxy maker is also getting closer to Microsoft, thanks to a newly signed patent licensing deal. This is a major victory for the Windows player on three fronts. First, it now has the two largest Android OEMs, Samsung and HTC, signed up, making it harder for others to deny its IPR holdings in the Google OS, and exploding the myth that Android is “free.” Second, the deals not only change the cost base for Android, narrowing the gap with WP7, but also present the Microsoft offering as safer in terms of legal protection.
Third, it gets a closer alliance with Samsung, which was one of the first OEMs to launch WP7 handsets, but has placed the Omnia Windows family in a distant third place behind Android Galaxy and bada Wave in its list of priorities.
But the new licensing deal also includes “closer collaboration” on WP7, including co-development and co-marketing, giving Samsung another way to hedge its bets against serious damage from the Apple suits related to Android patents. The level of royalties in the Microsoft agreement are secret, but reports earlier this year indicated that the US firm was chasing up to $15 per device. We can guess that, in return for Samsung‘s effective declaration of enhanced support for WP7, it got a deal closer to the $5 figure reported for HTC, a long time Windows Mobile licensee and the market leader in Windows handsets – especially as the deal is actually a crosslicensing arrangement in which Samsung will have had its own IPR to trade.
None of this is good news for Nokia, whose planned smartphone comeback relies on being the dominant WP7 player and making the Microsoft platform into its own. Microsoft now has Android related patent licensing agreements with Acer, General Dynamics Itronix, Onkyo, Velocity Micro, ViewSonic and Wistron, as well as the two largest Android handset makers. Microsoft general counsel Brad Smith wrote in a corporate blog post: “These two companies together accounted for more than half of all Android phones sold in the US over the past year. That leaves Motorola Mobility, with which Microsoft is currently in litigation, as the only major Android smartphone manufacturer in the US without a licence.” Of course, that legal action will become more politically significant if it is not settled before Google‘s $12.5bn acquisition of Motorola is finalized, probably early next year.