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Microsoft Virtual Toll Collector for Android Eco-system ?

Microsoft is now a ‘virtual toll collector’ for Android handset makers. Very soon every Android phone sold anywhere in the world will directly benefit Microsoft.

Microsoft has finally clinched the same deal with top Android phone maker, Samsung Electronics, that it did with HTC sometime back.

That is, all Android patent disputes between Microsoft and Samsung are now settled with cross-licensing deal within the two tech giants.

With this deal, it is almost certain that other smaller players in Android market base will also have to surrender to Microsoft’s patent claims and therefore, we will soon hear about more handset manufacturers striking royalty deal with Microsoft for settling patent disputes.

In other words, Microsoft is now a ‘virtual toll collector’ for Android handset makers. Very soon, almost every Android phone sold anywhere in the world will directly benefit Microsoft and therefore, Microsoft will generate far more revenues from Android sales than its own Windows phone sales, which aren’t picking up pace despite being an innovative and well-developed Mobile OS.

The most astounding thing here is that Google, the key driver of Android eco-system makes nothing out of sales of Android phones as it licenses Android OS to handset makers without any fee. Now that the handset makers will indirectly pay(licensing fee to Microsoft) for using Android as their mobile OS in handsets, they may also consider other options such as using Microsft’s very own Windows Phone operating system.

According to some estimates, Microsoft may already be on its way to making ~$444Mn from Android patent settlements from the leading two vendors in Android eco-system. And with more settlements on the way, these settlement revenues will only go north for Microsoft.

As Windows Phone 7.5 a.k.a Mango update is just around the corner, Windows Phone is seeing some serious improvements and effectively competing head-on with Android OS from various perspectives. Microsoft has also made it clear that it is willing to go the ‘extra mile’ and take ‘Windows Phone’ to a commanding position in smartphone space, no matter what it takes.


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