Microsoft has signed a striking agreement with Foxconn parent company Hon Hai, one of the largest contractor manufacturers in China.
“We are pleased that the list of companies benefitting from Microsoft’s Android licensing program now includes the world’s largest contract manufacturer, Hon Hai,” Horacio Gutierrez, corporate VP and deputy general counsel of the IP group at Microsoft, said in a statement.The licensing agreement means that on any manufactured Chrome or Android device, such as handsets and notebooks, Hon Hai group will pay royalties to Microsoft.
In response to this announcement Google's shares dropped by 1.5% to $780 on Wednesday morning. Google has been fighting on Microsoft's infringement of Chrome's and Android's software. However, several manufacturers, like LG, HTC and Samsung, have already signed licensing agreements and agreed on paying royalties to Microsoft for manufacturing these devices.
“We recognize and respect the importance of international efforts that seek to protect intellectual property,” Samuel Fu, director of the Intellectual Property Department at Hon Hai, said in a statement. “The licensing agreement with Microsoft represents those efforts and our continued support of international trade agreements that facilitate implementation of effective patent protection.”Read more at AllthingsD
It seems like Microsoft has been benefiting heavily off of royalties in the past few months. I wonder if this increase in revenue will be used to market the Windows phone more heavily so that Microsoft can become a leading smartphone competitor.
ReplyDeletehaha re cyrus i think although royalties itself is an extremely efficient and effective business plan, microsoft might not be able to "exploit" these kinds of opportunities in the future as major companies (like Google) become smarter. royalties payments do not last indefinitely and i think it is really necessary for microsoft to engage in new innovative designs, simply because the company could not entirely rely on royalty payments. it'd be smart for them to make use of this period of time to rethink / redesign their market strategies though, since their products are not the most popular right now
ReplyDeleteI can't believe Microsoft got signed the agreement. I wonder how Google will retaliate?
ReplyDeleteMicrosoft just signed a similar licensing deal with ZTE too. They pretty strongly came out in a blog post about how they see cooperative licensing agreements as the way to end the smart phone patent war.
ReplyDeleteAll the licensing deals are out of the ordinary for me. As it has affected google I'm sure they will retaliate some way but these licensing deals will be good for the market of patents. Everyone can cooperate with one another it will be good.
ReplyDeleteI wouldn't say Google dropped in response to this. There is a plethora of information getting priced into the markets every day - not that the financial markets are efficient to begin with. Moreover, there is also an extraordinary amount of noise to consider... I think it's really hard to have such a deterministic view!
ReplyDeleteAnyways, I liked your post; I did a post on it as well :)
Microsoft is doing a very good job in securing royalties for its patents, something google wished to do with it's acquisition of Motorola. That obviously didn't work for Google. I too wonder what Google's response to this will be.
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