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Microsoft continues to profit off Android

While sales of Microsoft’s burgeoning Windows Phone platform lag, the company continues to find significant revenue streams elsewhere in the mobile industry. Specifically, Google’s Android partners have proven to be an invaluable asset for the Redmond-based tech giant. Microsoft’s revenue from royalties HTC is forced to pay on each Android phone it sells is estimated to be between three and five times the company’s Windows Phone revenue, which could help explain why Microsoft has been so quiet to date when it comes to marketing its new mobile OS. Now, Microsoft has announced new agreements with ViewSonic and Acer that will bring in cash from two more Android vendors. Read on for more.

Microsoft on Thursday confirmed that it has reached licensing agreements with California-based ViewSonic and Taiwan-based Acer. Though the specific terms of the agreements were not disclosed, the deals will see ViewSonic and Acer pay Microsoft royalties on sales of their Android-powered smartphones and tablets. The deal also covers any forthcoming devices powered by Google’s Chrome OS.

“We are pleased that ViewSonic is taking advantage of our industrywide licensing program established to help companies address Android’s IP issues,” reads a statement from Horacio Gutierrez, corporate vice president and deputy general counsel of Intellectual Property and Licensing at Microsoft. “This agreement is an example of how industry leaders can reach commercially reasonable arrangements that address intellectual property.” Pleased indeed. An identical statement was also issued regarding the Acer agreement.

The deals may in fact grant these vendors’ some level of protection against potential patent attacks from the likes of Apple, but the clearer advantage for the companies is that they will provide protection from Microsoft. As smaller companies look to Android as a popular open source option on which they might base their efforts to enter the smartphone and tablet markets, margin-chopping deals like these will do little to encourage their potential ventures. And in the end, of course, consumers lose again.

Zach Epstein

Zach Epstein has been the Executive Editor at BGR for more than 10 years. He manages BGR’s editorial team and ensures that best practices are adhered to. He also oversees the Ecommerce team and directs the daily flow of all content.

Zach first joined BGR in 2007 as a Staff Writer covering business, technology, and entertainment. His work has been quoted by countless top news organizations, and he was recently named one of the world's top 10 “power mobile influencers” by Forbes. Prior to BGR, Zach worked as an executive in marketing and business development with two private telcos.