September 28, 2011, 3:14 PM — It remains to be seen whether Microsoft can recapture its dwindling share of the smartphone market when Nokia finally unveils its Windows Phone 7 device (presumably) later this year.
In the meantime, Redmond is ensuring it will generate mobile OS revenue in another way -- by collecting royalties for every Android-powered device sold by Samsung.
Microsoft on Wednesday announced a licensing agreement with the South Korea-based manufacturer that will give the software giant a cut of every Android device Samsung sells.
It's a neat trick, but not a new one. Last year, Microsoft made a similar licensing deal with handset maker HTC, which also sells Android devices (as well as Windows Phone devices). It also has hammered out licensing agreements with a half-dozen other smaller Android device makers over the past three months.
But the Samsung agreement is Microsoft's biggest Android patent deal yet.
In a blog post explaining the agreement, Microsoft attorneys Brad Smith and Horacio Gutierrez said:
"Together with the license agreement signed last year with HTC, today’s agreement with Samsung means that the top two Android handset manufacturers in the United States have now acquired licenses to Microsoft’s patent portfolio. These two companies together accounted for more than half of all Android phones sold in the U.S. over the past year. That leaves Motorola Mobility, with which Microsoft is currently in litigation, as the only major Android smartphone manufacturer in the U.S. without a license."
Indeed it does. And it'll be interesting to see whether No. 3 U.S. Android device seller Motorola Mobility -- which is in the process of being bought by Android-maker Google -- continues to hold out. The patent lawsuits between Google and Microsoft have been flying and could take years to settle. It's doubtful either company wants the litigation to drag on.
I also wonder whether a licensing deal with Motorola Mobility would help Google gain approval from federal regulators for its $12.5 billion acquisition of the handset maker. Maybe it's irrelevant; I'm just wondering here.
Finally, Microsoft emphasized in announcing the agreement with Samsung that it remains fully committed to its own mobile OS. "In addition, the companies agreed to cooperate in the development and marketing of Windows Phone," Redmond said in a statement.