Primetime: Microsoft’s Android Cross Patent Dealings

Lenovo, and Microsoft recently announced a collaboration agreement which sees Lenovo preinstall a number of Microsoft applications on their Android devices. In addition to the installation of a number of Microsoft applications on the ground, including Microsoft Office, Skype and OneDrive, Lenovo and Microsoft also signed a cross-license patents. Although the terms of this have not been disclosed, it is likely that Microsoft is able to leverage Lenovo collection of patents and vice versa. This cross-licensing agreement patent is not the first case that the company US technology has made with manufacturers of smartphones and certainly not the last.

The two companies have some understanding, explaining how consumers would benefit from the Microsoft productivity applications right out of the box. This is true and Microsoft are likely to see a slight increase in the number of mobile customers using their applications. With the pre-loaded on the device could also encourage customers to buy Lenovo devices, either personal or professional applications Microsoft. Although it is quite easy to download applications from Google Play Store, there are many customers that smartphones can not consider trying the Office applications on your device.

However, there is much more to this provision to bring some users to Microsoft applications and services. First, let's take a look at why Microsoft organizes these licensing agreements and what can benefit. The crux of the matter is that there are several proprietary Microsoft technologies integrated into Android, which means that manufacturers must pay Microsoft a royalty for devices ship with the operating system of Google. Many have signed checks thoroughly in Redmond since 2011. The exact sum per unit is not known, but is believed to be between $ 7 to $ 15. In 2014, Microsoft sued Samsung for not paying the license fee and the two companies have finally agreed to share their patents between the two companies. We also saw Microsoft applications that appear in the Samsung flagship devices, such as families Galaxy Galaxy S6 and S7. Back in 2014, annual revenue Microsoft patents were considered around $ 2 billion. For a large and profitable that Microsoft This is a relatively small amount, but nevertheless company contributes to the company and the majority goes directly to the bottom line.

Android is the market leader in the world today, so surely Microsoft Office patents should be popping champagne bottles? Not so fast. Microsoft to all manufacturers did not address. Far from it, actually, and since 2011, there have been considerable changes in the smartphone market. We saw a number of Chinese companies like Huawei, sell Android devices increasingly, while the names established in 2011 selling well, much less as HTC. Many of the latter part manufacturers that Android does not have a license agreement and Microsoft are taking market share from those who do. This in turn reduces revenue comes from Microsoft patent licensing agreements. In fact, in the last conference Microsoft announced quarterly results a year 27% of the fall of the year and blamed a decline in revenue per unit licenses and allowed drives. patent cross-licensing of Microsoft to combat this decline in revenue.

Until relatively recently, Microsoft was pushing its own mobile operating system Windows Phone. As a platform, Windows Phone still exists and is sold to companies that rely on Microsoft Windows and server platforms that Windows Phone has some advantages. For a long time, Windows Phone has offered the best experience of the class to use Microsoft applications and services on the road, but it was not a commercial success. Microsoft changed its approach, investing time and effort in improving their productivity applications. To use the example of Microsoft Office, this is a good productivity suite available on all platforms, including Android, iOS, Mac OS, Windows and even Linux and Chrome OS via Office Online. If a number of Lenovo treat customers of Microsoft Office on the Android platform and profit, they may be tempted to subscribe to Microsoft Office 365. In the short term, this will increase revenues but Microsoft in the table in general, these customers they buy in Microsoft Infrastructure. From this point, no matter if they move from Android to iOS or Windows to Mac OS or Chrome OS, you can still access their Microsoft applications.

Microsoft wants to control the customer experience from beginning to end, but is happy for customers to access their applications and services by any way he or she wants. In fact, they are treating the device as a silly way client connection. In this arrangement, it is much less important than the manufacturer or the platform is the current market leader, but only customers can access the products and services of Microsoft. However, pressing this advantage, Microsoft has more patents not sign cross-licensing or similar arrangements with manufacturers. Given the Microsoft patent portfolio and how it will be useful for manufacturers who want to enter the North American market, such as Xiaomi, we might be seeing more of these agreements in the coming months. The alternative could be Microsoft continues all manufacturers trying to sell the devices in a market easy to use patents.