In a statement earlier this morning, Microsoft announced that it has reached an agreement with LG over patent licensing that will see the South Korean company pay a fee for each Android device sold to the Redmond-based giant. According to Microsoft, about 70% of the total Android devices sold in the United States are connected to a company’s patent.
The full details of the agreement weren’t made public, but Microsoft confirmed that for each Android and Chome tablet, smartphone or other category of device running on these two operating systems, LG is going to pay a small, undisclosed fee.
Previously, Microsoft has reached licensing agreement with 10 other Android smartphone and tablet sellers including Samsung, HTC, Acer, Compal, Quanta, ViewSonic, Wistron, and Onkyo among others. Only a few Android sellers now remain unharmed by these licensing deals, but analysts think that Microsoft is working to bring Sony, Motorola, and a couple of other Android manufacturers to the “party.”
Microsoft and LG didn’t say which patents are in question and how this decision will affect the prices of the South Korean’s Android smartphones. In the past, Google has accused Microsoft of being a “patent troll” because it’s looking to strike deals with all Android makers in order to raise the prices of the devices. As a result, Google bought Motorola Mobility in order to allow Android makers to fight back, but so far without any real success.
A previous report has also confirmed that Microsoft is making more money with Android than it does with its own Windows Phone 7 platform. The reason is simple: more than 750,000 Android devices are activated daily worldwide, most them of them being sold in the US – and for 70% of them Microsoft gets a royalty fee. With the help of this cash infuse, the Redmond-based company will spend more than $200 million in the US this year to promoted the Windows Phone 7 operating system. Another huge amount will also be invested in marketing campaigns across the globe.
Horacio Gutierrez, Microsoft’s corporate vice president at the Intellectual Property Group division, praised LG for finally signing an agreement with the Windows Phone 7 developer. He said that the two firms have an excellent long-lasting relationship and that it would have been a pity to ruin everything over such a small thing.
The Intellectual Property Group has been a huge success at Microsoft ever since it was introduced, said Gutierrez. The company has signed more than 1,000 licensing deals with partner worldwide since 2003.