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HTC Is Paying Microsoft $5 For Every Android Phone
jcarr writes "According to Citi analyst Walter Pritchard, HTC is paying Microsoft $5 for each Android phone it makes. This may be related to a report from last year: MS and HTC sign patent deal. So now we can't even write a free OS?"
Assuming this is correct, it's because HTC chose to sign the deal. That sounds to me as a spectator like a dumb business decision, but it was HTC's to make. I understand some companies paid $699 for a Linux license not long ago - does that mean we can't write a free desktop OS?
Several points:
With current patent law, free has nothing to do with weather or not you infringe on a software patent. Until the law is changed, a free OS could still be open to an infringement claim.
It may not be a bad deal for HTC - it removes the threat of litigation which may make their phones more popular amongst carrier since they don't have to worry about being caught in a lawsuit, and if MS agreed to defend claims, based on MS' patents, against HTC arising from possible infringement it further protects HTC.
No one knows if HTC cross licensed patents - it's possible HTC is also getting money from MS for HTC patens so the deal has a revenue impact but in reality no cost.
I'm a consultant - I convert gibberish into cash-flow.
The Android version of Linux is so popular that Phone manufacturers prefer to pay microsoft to not have to use windows phone.
Microsoft does have an interesting strategy btw: Microsoft does not seem to want to kill linux anymore because they can make
easier money just with licensing fees from companies with deep pockets.
It also says something that the phone makers would rather pay the $5-10 per phone than use windows phone 7.