Microsoft’s New Surprising Money Maker – Android

by Kham Tran

Microsoft has been making moves lately to profit off their competitor, Google’s, Android operating system. An announcement has been made this week that Microsoft will start collecting royalties from all sold Samsung devices that use Android. This means that even though Microsoft has its own mobile operating system and owns no part of the Android operating system, it will make money on nearly every single Android phone or tablet that sells.

This licensing agreement with the South Korean manufacturer is just one of several Microsoft has been negotiating lately. Last year the company made a similar arrangement with HTC for their Android devices. Earlier these year, Microsoft then made smaller patent arrangements with six other companies: Acer, ViewSonic, Velocity Micro, General Dynamics, Wistron, and Onkyo. While the deals vary per company, Microsoft’s HTC deal gives them $5 for every Android device they sell.

What is the motivation for Microsoft to gobble up profits from its competitor’s devices? Microsoft has seen lackluster success in its efforts to compete with Apple’s iPhone. Even though they have said they are not abandoning their mobile Windows operating system, and they are still on track to release the Windows Phone 7 this year, the company has not been able to make progress in their quest to dominate the smartphone market.

Google, on the other hand, has been steady competition for Apple with their popular Android operating system. Many users turn to an Android phone if they don’t have access or money for the more in demand iPhone. When Google released the Android operating system they chose to focus more on the benefits and profits made in the Android marketplace over the smartphones using their OS. Seeing the loophole, Microsoft has decided to swoop in and snatch up some of the profits from those devices.

Google’s recent acquisition of Motorola Mobility is the only thing standing in the way of Microsoft making money on all of the Android devices. Regulators have been all over Google since the announcement that they were acquiring the mobile device manufacturer – citing concerns about monopoly. Now it looks like the move was a smart one to keep Microsoft from getting the whole pie. Even so, rumor is Microsoft is in talks with Motorola as well.

This certainly must be an eye opening lesson for Android creator, Google, as they watch one of their main competitors profiting from their hard work. Google currently spends billions of dollars a year maintaining Android and now Microsoft has found a way to make a profit on their work.

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