The cost of Android devices could go up by as much as $15 due to demands by Microsoft who through a variety of patents could end up earning billions from Android device manufactures.The US software Company has already slapped Samsung with a series of patent payment demands, with HTC, Acer, Toshiba, LG and Motorola also in their sites.
HTC already pays Microsoft $5 for each Android handset they produce, with this set to climb to $15 as Microsoft, who is struggling with their own Smartphone offering, tries to extract the maximum value from the patents that it owns.
Some observers claim that Microsoft could earn more from their Android payment royalties than they do from their Windows Phone OS.
Yesterday Microsoft said they had recently signed an Android patent deal with Taiwanese phone manufacturer Wistron.
This is the fourth patent-licensing deal signed by Microsoft within the past 15 days with an Android device manufacturer.
Meanwhile Samsung has decided to haggle with Microsoft over the proposed royalty payment. Microsoft wants $15 dollars while Samsung is believed to have offered $10 per Android handset and table.
This year Samsung produced 19m smartphones in the first quarter and if the Company is forced to pay a $15 per handset royalty it would have netted Microsoft $285M.
Several Smartphone manufacturers are currently fight patent claims. US Company Barnes & Noble is suing Motorola over their Nook e reader, while Nokia is chasing down wireless patent royalties from several manufacturers.
There’s also a lawsuit going on against Motorola, in which it’s claiming that its Android handsets infringe, and with Barnes & Noble over its Nook e-reader (which uses Android).
Then there is the issue of the Nortel patents which were stripped away from Google by a consortium that includes Microsoft, Apple and Nokia.
Research in Motion the makers of the Blackberry phone is already yelling loudly over the $4.5 Billion Nortel patent grab that saw several Smartphone patents change hands.
Analysts are predicting that the price of a Google Android phone could be pushed up by as much as $40 as several patent owners lay claim to royalties.
This they claim could force manufacturers to make and sell smartphones running the new Windows Mobile OS which will come at a fixed price and include all of the patents owned by Microsoft and the partners who bid for the Nortel patents.
The Guardian newspaper in London speculated that once that happens, then Android handset makers may really begin to wonder whether the Android “game is worth the candle”.
Currently Microsoft offers Windows Phone licensees indemnity against software patent lawsuits. That could potentially make Windows Phone a lot cheaper – if Nokia and Microsoft really start getting litigious (to say nothing of Apple, which is trying to put Samsung in a vice over “design” and patent issues.
Apple, which was a partner with Microsoft in buying the Nortel patents, are looking relatively unscathed despite losing a recent iPod patent claim.
For Microsoft, Android is starting to look like a win-win. If Android prevails, it gets lots of money – and there’s no obvious sign in big corporations of them tearing out Microsoft Exchange in the short term.