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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?"
Software patents need to be abolished internationally, it's that simple.
Disagree != mod troll.
In related news, they are making more on Android sales than on Windows Phone 7.
Proud member of the Ferengi Socialist Party.
Precisely. HTC probably decided that it was worth $5 per handset to indemnify themselves from litigation.
Whether the fee is paid to MSFT or gobbled up by patent lawyers seems like a morally neutral thing. It's not like one group is significantly less sleazy or sucks less scum than the other.
just the phones sold in the USA, Microsoft patents aren't valid anywhere else (95% of the globe)
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.
Trouble is HTC are paying Microsoft for inventions Microsoft didn't make. HTC interface is not the crappy Microsoft one, and the underlying OS predates Microsofts entry into the handset market.
So what exactly is HTC paying Microsoft for?
Protection money? That's what it comes down to, MS has convinced them that Microsoft can make everyone's life so difficult that HTC can gain an advantage simply by paying the fee.
But the B&N challenge shows Microsoft has nothing in its patent portfolio but bluster and vague threats covered with NDAs. That's why MS isn't trying to go after Google directly, rather picking off smaller players.
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.
Microsoft, now relegated to the position of worlds most prestigious patent troll.
according to Google Voice my girlfriend is my daughter.
Try again without that Kansas dialect.
Or maybe Google detects you're in Alabama and makes an assumption.
And they wonder why I hate MS... These assholes are abusing the faulty US patent system to effectively enable it worldwide. Why are they paying $5 for EVERY phone, even those that are not destined for US market.
HTC is NOT an American company. The phones are not manufactured in US. I don't live in US. Why does the US patent law apply to me when I buy an HTC Android phone?!?!?!?!?!
Important thing to remember, HTC phones aren't Android phones. They're "Android plus extras, and some of those extras come from Microsoft.
As long as we have software patents. Look at the h264/Theora/WebM fiasco.
The H.264 licensors include global industrial giants like Mitsubishi. Companies that have been researching video technologies since the 1920s. Companies which manufacture damn near every piece of video hardware sold on the planet.
Google can deliver a slice of the web and the mobile market --- a generous slice, to be sure, but still only a slice. It has no significant presence elsewhere in video. It can't stop or slow development of a codec like HEVC/H.265 which is going to look very good to Netflix and has the potential for strong sales elsewhere.
The real reason why open source often lags isn't patents or licensing.
It is experience, organization, money. manpower. resources, markets and marketing,