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Microsoft Makes an Astonishing $2 Billion Per Year From Android Patent Royalties
mrspoonsi sends this report from Business Insider:
"Microsoft is generating $2 billion per year in revenue from Android patent royalties, says Nomura analyst Rick Sherlund in a new note on the company. He estimates that the Android revenue has a 95% margin, so it's pretty much all profit. This money, says Sherlund, helps Microsoft hide the fact that its mobile and Xbox groups are burning serious cash."
Hardware is cheap.
Software is expensive.
Charging for IDEAS, though... THAT is where the real money is.
THL phish sticks
...for a bunch of "inventions" that are almost certainly blindingly obvious to anybody over the age of four, and under the age of 55. No, the patent system isn't broken at all, nuh uh. Why do you ask?
Took em long enough.
Phones are so heavily subsidized that between the monthly payment and the deep discounts at time of purchase on the handset itself, the average user will never know nor care.
On the positive side, Microsoft can always find someplace to lose $2bn.
In SOVIET RUSSIA... erm...NSA AMERICA, the Internet logs onto YOU!
2: ???
3: Profit!
Laughter is the Spackle of the Soul.
I legitimately wonder how many (if any) of the features covered by the patents in question would not have been implemented in Android if not for the work of whoever filed the patent. If the answer is few or none, then patents are subtracting rather than adding value to society in this domain. If the answer is many, then there is at least an argument to be made.
(no sig)
It seems like about every three months or so an article about this makes its way onto /.
A product that a company tries to kill is generating massive profit for them via extortion. Fuck them.
And if not, what features/functions of Android are the patents for? It strikes me that most things Android does that would be covered by a patent would also apply to Apple.
Now, Apple may have other cross-licensing/patent agreements for other stuff so they aren't making a cash payment to MS, but instead a payment in kind, but I'm still curious what Android does that MS holds patents on.
If Microsoft is making $2,000,000,000 off Android, how much is Google and the manufacturers making off the platform?
Goodbye Slashdot. You've changed.
of all the products Redmond hasnt ritualistically pedaled into the ground, XBox seems to have defied even ballmers best attempts. their unfortunate XBox 1 unveiling which included an actual redaction of features and freedoms when compared to its competitors was certainly bad PR, but its not a killing stroke. XBox still maintains excellent game titles, and despite the hardware being plagued with flaws a return policy that basically sends you a free one console when yours unpredictably dies. its got netflix support, so you get a good selection of movies as well.
though id say XBox has its days numbered with Sony switching to the x86 platform. if fable, halo, and things like gears of war get a wild idea to move to Playstation, there isnt much incentive for customers to maintain their relationship with Microsoft. And the current 360 customers who remember the DRM snafu at the Xbox 1 release will certainly consider it a selling point if left 4 dead isnt exclusive anymore.
Good people go to bed earlier.
2: ???
3: Profit!
2. Hire lawyers.
Shame about the software, but they'll eventually figure it out and stick to what they're good at.
> software is math
Games are art, and are software.
Most games are 95% art, 5% math, and 100% software.
Math CAN be done as software, but so can art and many other non-math things. Some software is math. A LOT of software has little to do with math.
> math isn't supposed to be patentable.
That's a common misconception, started and encouraged by people with a particular agenda. The rule in the US is:
The LAWS of nature, including mathematics, are not patentable.
Note that it's the basic laws that aren't patentable. Things that USE those laws are.
Gravity isn't patentable. An elevator is.
Momentum isn't patentable. A brake system is.
Division isn't patentable. eBay's feedback system is.
Light reflection isn't patentable. The way Blender simulates reflection is, if it's novel.
Technically it's only the implementation of an idea that is supposed to be patentable. With physical patents if you can accomplish the same thing by other means then it's fair game.
Somehow in software they've decided to allow patenting the *idea* of momentum when scrolling via swiping, or bounceback when you hit the end.
The equivalent to patenting physical implementations would be to allow protection of their *implementation* of an idea--and in the software world that implementation is already protected by copyright, so there's really no need for software patents.
I don't know about you, but I certainly don't go searching patent applications when implementing something.
I'd argue that if multiple people independently invent something that is covered under patent then the patent should be invalidated as too obvious.
Patents aren't about promoting the progress of science and the useful arts, they're about a business model based on rent-extraction via arcane legal means. As alternative manufacturing options such as 3D printing mature (assuming they're not strangled by the patent titans) patents will become as obsolete and ineffective as copyright is now.
So wtf does MS do for the 5%?
Rick Sherlund estimates. He doesn't know. Nobody knows except very senior management at Microsoft and Google.
The report also contains the following: "Sherlund believes Microsoft needs to spin out Xbox. He sees it as an orphan group at Microsoft that doesn't really fit with anything it's doing."
I guess he hasn't heard of the "Three Screens."
The fact that the patents are licensed under RAND, and are not discriminatory in terms of who can purchase them, and that Android is trouncing MS' own product line is the polar opposite of "stifling competition". These RAND patents have the inverse effect of enabling competitors to enter the market.
"That's why nobody has or will, in the foreseeable future, write a new desktop/laptop OS that competes with Windows."
Possibly because the desktop is a concept Microsoft if not invented, popularized. It was a niche market at best before MS' entry. Apple is entirely capable of producing a competing product (and they do), but price themselves out of competition because they're not after that. The various corporations behind Linux are probably capable of doing so as well, but there's little money in it for them, and they tend to focus on other markets -- the people interested in building a competing product simply lack the capability to do so in this case.
At least someone is making money from Android besides Google and Samsung. I really wish Sony can get their act together and release an amazing phone. They have it in them to be able to do better than Samsung and Apple.
You can patent a file system layout that stores 11 characters for file name and three for file extension, and puts those in specific places on the disk. But is that really invention? A minutely different layout would be a whole new "invention". Now if an operating system mounts the "invention", everyone plus dog has to pay tax on the "invented" layout. How are we benefiting society here? If the patent system pretends to promote benefit to society, trivial compatibility shouldn't be "invention".
I mean their mobile division needs to make money with something.
Microsoft's so called "IP" is being more valuable than their actual production of software. Microsoft is becoming little more than a huge IP and patent troll firm that has managed with their operating system monopoly, to bully the hell out of everybody including the Government of the US and companies like Apple and Sony into going along with the IP value bullshit.
It was Microsoft and others that created this situation. This overvaluation of IP is to a large extent responsible for the complete devaluation of the US economy and the rabid denuding of the core of the very economy, which was the skilled and diverse middle class work force within the US.
IDEAS are cheap the implementation of ideas is where value is added. If we do not change the patent system soon the economy of the US will completely collapse under the burden of paying for overvalued so called Intellectual Property Values. It distorts and corrupts the very core of an economy.
The English realized the folly of the Royal Monopolies and how they were strangling trade and enterprise, Queen Elizabeth the first in her latter years finally began to see the value of the small shop keeper, wine merchant and candle maker. The modern day Lords of IP like Microsoft and other need to be brought down a notch and the economy will blossom as a direct result of their dismemberment, the same way the break up of Standard Oil and US Steel did.
This message was not sent from an iPhone because Peter Sellers really was a deviated prevert without a dime for the call
Those who can, do.
Those who can't survive on patent money.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Pure profit? More like Pure Extortion
Google should start taking them to court. I do not know why they are not doing something about it and letting all this back room blackmail stuff go on. At least Barns and Noble had the balls to stand up and they are way smaller than Google; can't wait for those results come out. Now that MS and Apple marriage happened when they took ownership of Nortel patents they can't wait to attack someone (especially Google). Google better buy Blackberry or Android's days are numbered. These patents laws are stupid, they've been changed from their original intent to be come a bad taste in peoples wallets and ideas; all this just to satisfy someone hunger for money.
Nope. This shit has got to go.
Sent from my ENIAC
Anyone else seeing the misalignment here? In an industry where ideas can arise, be implemented, decline and be forgotten again in the space of a year or two (sometimes less), why should patents be granted for two decades?
I'm thinking from the perspective of a creator or consumer of a game. Over 90 percent of the budget will grow into art versus the math for collision detection and such. The buyer / player chooses a game primarily based on it's characters, graphics, and storyline, all artistic elements. I'd bet more than 90% of players have commented on a games graphics and fewer than 5% have said somethingl like "wow this game has awesome physics stimulation".
Byte size isn't very meaningful, of course. By that measure, games would be 99.5% artistic media. Size wise, a picture truly is worth 1000 words.
Let me be one of many to say it is just disgusting.
Please let software patents die. DIE DIE DIE.
> Sorry, but ALL software is an expression of math.
Thinking about that for a minute, seems that statement his true, and almost meaningless such that it's misleading. Lara Croft is of course software, and pure art. No mathematicians were harmed in the making of this character. Music - rhythm, tone, and harmony is math. Although harmony is a mathematical phenomenon, you would be fooling yourself, and doing yourself a disservice, to say "eh, music is just math."
Gears and levers are an expression of division - arithmetic. Yes, E = MC2 and all of the universe is an expression of math. This is true. Once you decide that everything is math, though, the word "math" is a synonym for "anything"; the word loses it's meaning.
In order to discuss, and to think, meaningfully, we need words to have meaning. "Everything and anything is an expression of math", while technically true, leaves us unable to say anything useful about math. A useful definition, one that allows us to discuss and think clearly, is one where "math" refers to the work on mathematicians and engineers, distinct from the work if painters and composers. Harmony is a hidden expression of math, but Concerto #5 is art, not math. So it is with Lara Croft - art, not math, for any useful meaning of the word.
i am all for closing down any patent or copyright (both software, music movies, drugs, or anything else) but since current laws are as they are i would too if i was microsoft take as much money as legally possible from society/other companies/other people regardless if its "right" or "fair" only thing that interests me and most other people is "is it legal" and "does it bring money"
i really don't enjoy raping in any way or form, but if it was LEGAL and you were payed 2 billions per year to perform it i would do it
Using inflammatory language to criticize what is an ordinary business transaction is not an effective strategy.
It should be ILLEGAL for any company to make statements like "xyz is violating our patents" unless that statement contains details of which patents are being violated and which products/features/etc are doing the violating.
If Microsoft is forced to reveal in public which patents are being violated and how, it would allow the Linux community to evaluate that information and find prior art where it exists or find ways to make linux not violate the patent (e.g. kernel option to disable the relavent code or rewrite the code to not violate) and generally make it harder for MS)
Remember the TomTom case, evidence came out about a specific FAT patent related to long file names and TomTom just disabled that feature (since they didn't actually need it)
If MS decided to shut it all down, your single player disc based games will still work, but all the rest is gone.
All the rest? Microsoft shut down Xbox Live for the original Xbox, and as I understand it, same-screen multiplayer and System Link multiplayer kept right on working.
they're practically STEALING from microsoft with these rates.
It would only take one popular device to install that driver
For one thing, you'd need to have a Microsoft file system to store the installer for that driver. For another, I was under the impression that only members of the Administrators group could install file system drivers.
A better question is, why not just use UDF? Windows supports it for both reading and writing, beginning with Vista (XP supported it read-only).
Because it isn't April 2014 yet, and Windows XP still supports it only read-only.
You can build a better mouse trap and get a new patent... In software pseudo patents, people are getting judgments against them even though their "mouse trap" is implemented completely differently.
That would require that the file system itself be rearchitected to support concurrent block-level write access from more than one host. I don't think FAT and NTFS support that. It's more common as I understand it to run the file system on one machine and have the file system handle all the concurrency, which is what MTP, FTP, HTTP, SMB, and similar protocols do.
And the U.S. Supreme Court has completely deferred to Congress on what constitutes "promot[ing] the Progress", refusing to find copyright or patent statutes unconstitutional even in the face of evidence that they impede progress.
Google Play Store works even on 2.2 devices, as sqlrob pointed out. Google Play Store and the other Gapps are available only from device manufacturers that have signed a contract with Google. Perhaps the cheapo Android devices that can't get on Google Play Store are that way because they were built from AOSP, like the eighth-generation and prior Archos tablets, instead of going through Google. For these, you'll usually want to put on the Amazon Appstore.
Yeah, it's about 95% profit.
Ken
If Samsung is willing to go toe-to-toe with Apple over their design patents then you better believe that if these patents lacked validity Samsung would have smashed Microsoft in court rather than just pay them.
That's because people who impliment things are called implimentation specialists. They are pretty good at figuring the best way to make things work.
Go ahead and try and sell your "implimentation" outside your office and see how long it takes for the cease and desist letters arrive.
I'm pretty sure a preliminary patent search is one of the first things on the list after the words "i have an idea are uttered"
faster-then-light communication patent
http://www.google.com/patents/US6025810
4wdloop
Two things: patent terms in the US are 17 years, and Fat32 was introduced in August 1996. That means (depending on exactly when the patent for Fat32 was filed), stick a fork in this pig, she's done. There is very little else that they have in Android (unless they are lying about what they created), or if they bought some patents from inventions made by others. At least patents are done at 17 years. Copyright should be the same. Trademarks should be for 90 years max. None of this should be beyond a human lifespan.
"Microsoft is generating $2 billion per year in revenue from Android patent royalties, says Nomura analyst Rick Sherlund in a new note on the company. He estimates that the Android revenue has a 95% margin"
How does it cost £100 million per year to fax an extortion note? ref
And the rich & powerful in the US regularly wipe their asses with said constitution (not much better in other countries, though).
It's a sad state of affairs. Infuriating, actually.
Last year when all the stories broke of how MS was extorting handset makers for 5-15$ per android device sold, I bought MSFT stock. I haven't spent a dime on MS products for at least a decade, but if they are still getting rich off me, at least I share in their evil profits now.
He estimates that the Android revenue has a 95% margin
The lawyers and the people sending the bills cost US$100 million?
Other kinds of rackets also pay big bucks, including Obamacare, bailouts for bankers, money laundering by big banks, waging wars etc. Until someone bans such activities and imposes harsh penalties on PERSONS involved, forget about recovery of US economy.
Actually, a great measure would be time (and dollars spent gives almost identical results). If you look at the engines, they have been worked on for years, even decades. Whereas the art, not so much - a few years in some titles. And all software is math, even the a=b variety. Computers are limited turing machines and therefore all programming languages are math expressed differently. Most is very badic math, but it's math. Whether highly complex and novel programming techniques should be patentable is a completely different question. I tend to think they should. But current software patents are mostly completely obvious.
For many games on the 360, online play is an integral part of the game and in many games online is the only way to play multiplayer
Then buy different games if you plan to play multiplayer long term.
I guess the humor of "you're right, fool" didn't quite work in this format. Sorry for "insult", it wasn't meant as an insult. It was intended as a humorous introduction to the idea that while what you said is technically true, we would be missing of essence of the thing if we focused on it's underlying mechanics.
> To give another absurd example, if my house did in fact cost $150,000 and I then (stupidly) put in a $3m gold and diamond light fitting (that weights 1kg) then is my house comprised mostly of light fittings?
You've demonstrated that absurd calculations give absurd results, that "garbage in, garbage out".
If I were a hippopotamus, I'd need a much larger keyboard. Since I'm not a hippopotamus, is it in some way useful to discuss that?
For an average $150,000 house, what would be your rough estimate for "light fixtures make up about ___% of the house"? I think you'd agree, light fixtures are less than 1% of the typical house. Whether you measure by cost, weight, labor required, market value or whatever, the answer is the same magnitude. For actual projects in the real world, there are several relevant measures, and they generally end up with similar answers.
... another day, another story.
"Division isn't patentable. eBay's feedback system is."
> No sane system would allow such a patent. Only in the US.
"No sane system" is your opinion and that's fine. "Only in the US" is a mistatement of fact. That's not true.
> Again it breaks down into two parts: the mathematical algorithms used and the software written to implement those algorithms.
> Neither should be patentable.
Okay.
> The math cannot be protected, but your actual bytecode implementation of that math can be copyrighted.
Sorry, it can. The law is that new machines can be patented and it doesn't matter if the multiplication operation is done by a lever, a gear, on an X86 instruction. You may think it SHOULD not be protectable, but in fact is IS protectable. Why is this important? Because if you seek to change the law, it's very helpful to know what the law is that you're wanting to change. Even better is to know WHY the law is what it is, so you know what traps you may fall into by changing it.
> First, people you confuse the claim that math isn't supposed to be patentable with the claim that math isn't patentable.
> You're mixing up the status quo with how the world should be.
> It's circular reasoning, like saying that the most stupid laws [dumblaws.com] are alright, because they are laws.
I didn't say any law is alright. I said "here is the law", and quoted what the law is. The claim I responded to was "math isn't patentable". That's just plain false, period. Had the claim been "in my opinion, the law should be that anything which can be mathematically described ought not be patentable", that would be a different discussion.
PS - dumblaws.com is about 50% BS, 50% somewhat accurate. Be sure to check on their claims before you believe any of them. The ones that cite the law frequently distort the meaning significantly and the ones with no cites are mostly urban legends with little to no basis in reality.
> Second, you either misunderstand or ignore the formal theory behind the claim that software should not be patentable, because it is math.
The theory that you presented is that mathematical work shouldn't be patentable because mathematical work shouldn't be patentable, and software gets converted into math. That's not even circular reasoning - that reasoning never leaves the starting line.
All programs eventually get turned into math by the compiler or interpreter, yes. Just as your post got turned into binary bits. There are underlying mathematical principles used by the computer to execute the program, yes.
Similarly, a painted portrait is a representation if the physics of light, expressed using chemistry, pigments. The essence of potraiture is neither physics nor chemistry.
> I see no reason whatsoever for software to be patentable
> when it is much better described and protected by copyright law.
I agree, in the same way that wood should not be patentable. Also, gears aren't currently patentable, nor levers or wheels. New inventions built using gears are patentable. New inventions built using wheels are patentable. New inventions built using software are no different.
I don't care if an invention is made of wood, steel, stone, or iron oxide on a hard drive. It's not what I thing is made of that matters, I don't think.
> Heck all copyright terms should be reduced but for software it becomes really ridiculous.
Agreed, due to the accelerated advancement of technology. 10-15 years after a patent issues, maybe 20 years after issue for copyright would be more reasonable. A problem is that the patent office is a federal agency and as such takes several years to finally issue a patent. That makes shorter terms a problem - by the time the patent is issued the invention may well be five years old.
"No sane system" is your opinion and that's fine. "Only in the US" is a mistatement of fact. That's not true.
It's not just my opinion, but that of most of the world. And even then that of many within the USA. The only exceptions I think are Japan and South Korea (well that's what Wikipedia tells me).
The law is that new machines can be patented and it doesn't matter if the multiplication operation is done by a lever, a gear, on an X86 instruction.
There is a difference. A lever says apply force at this vector and this physical object will produce X result. An X86 instruction, which is just an abstraction of machine code, simply toggles 0 and 1s and is completely generic.
Don't think about it as "changing the law", think about it as harmonising it with the rest of the world. As for the consequences (or traps), you can see that Europe has actually benefited rather than suffered since the inception of software so you don't need to worry that much.
Phillip.
Property for sale in Nice, France
That's an interesting choice of words, "toggle". Pull up a Google image search for "toggle".
For "toggle", you get a bunch of levers of various kinds, and some jackets.
> There is a difference. A lever says apply force at this vector and this physical object will produce X result.
The lever itself doesn't "say" anything, nor does it care about any result. As the Google result indicates, a lever is something that toggles -
a toggle switch is a switch with a lever.
> An X86 instruction, which is just an abstraction of machine code, simply toggles 0 and 1s and is completely generic.
Yes, it "simply toggles". Exactly the same thing a lever does. Just as a lever is a lever and doesn't care what other parts are
around it, the same with the instruction. They have precisely the same attributes. Interesting, isn't it.
It's been my experience that 98% (or so) of patents are issued for non-novel ideals. It's merely a race to put a stake in the ground for future litigation (and mitigation of future litigation). What this has done is prevented or slowed firms, small and large, from innovating due to the threat of litigation. How much further ahead could we all be, technologically speaking, if ideas could be implemented without this black cloud hanging over people's heads? Instead we see the same regurgitated products, decade after decade, with with only incremental, and often unneeded or unwanted 'upgrades'.
Many coders who work in high level languages don't know what an "algorithm" is, so I disagree with the idea that they are professional algorithm designers.
A naive implementation of an interpreter is "algorithms" - generic functions for converting any pattern of type A into type B. As you said, long ago someone did the math, just as long ago someone designed the (mathematical) musical scale. Today's musicians and developers don't do a lot of math.
Designing a user interface that's beautiful, simple for beginners, and powerful for power users isn't a mathematical equation, it's an art, left-brain activity. If it were a math I could do it. My development team consists of me (the algorithms guy) and three people with art degrees. I can't do their job, not even a little bit. They can't do fractions, that's how mathematical they are. To make software requires all four of us - one math person and three people who have no math skills at all.
My 25% of a project is to take their art and manipulate it mathematically.
> I am saying that the PRODUCT is math, not the thought process that goes into it.
A PRODUCT is something people buy.
I suggest that one of the greatest software makers of all time*, Steve Jobs, would tell us that the product is anything but math.
The math behind Mac is mostly the same as the math behind FreeBSD. The difference is the artistic aspects - design, etc. They are the same math, are they the same product? One is a bestselling product, the other hasn't even become a product at all.
Steve Jobs did a lot of stuff that annoys me, but he did it very well.
It's been an interesting conversation, thanks.
I believe I do understand your point, I just have a different view.
I understand you to be saying that a CD "is" a bunch of numbers.
That's true, whether it's a music CD or a software CD.
However, I'm of the opinion that it's myopic to view the contents of the CD as "a bunch of numbers". Mozart isn't a bunch of numbers. To say that's what music IS, one misses the essence of the thing.
Similarly, my wife IS a pile of hydrogen and oxygen. She's defined mostly by her DNA, a mathematical sequence. To look at it that way is to be absolutely blind to what my wife truly is, in my opinion.
Anyway, thanks again for an interesting conversation. I look forward to reading your thoughts on the next topic.