Cram my freebies into Android phones and get a royalty discount, says Microsoft (allegedly)

Mobe makers get lower patent fees in exchange for bloatware


A new report claims Microsoft hasn't been offering Android device vendors any money to bundle its mobile apps on their phones and slabs; rather, it has offered to reduce the tolls it collects from the mobe-makers.

Citing sources among supply chain players in China and Taiwan, DigiTimes Research says Redmond has offered to cut its patent licensing fees if Android vendors agree to ship their kit with Microsoft apps preinstalled, including OneDrive, OneNote, Skype, and in some cases Office.

Nearly every company shipping devices that run Android has now inked a licensing deal with Microsoft, which claims to hold patents covering technologies critical to the functioning of the mobile OS.

The software giant has consistently declined to name just which patents it's talking about or how Android might infringe, but in the past it has claimed to hold "approximately 200" patents that it could assert against the OS.

It shows no signs of slowing its shakedown efforts, either, having declined an offer from the Open Invention Network (OIN) – an industry consortium that aims to protect Linux from patent lawsuits – to talk about settling such matters in a more neighborly way.

That's no surprise, because there's good money in this game. Microsoft has never disclosed the terms of any of the deals it strikes with electronics makers, but they are believed to involve a fee in the $5 to $20 range for every Android device sold. Some analysts have estimated that Microsoft's annual revenue from such fees has already grown to $2bn or more.

But the firm could stand to make even more if it convinces Android users to sign up for its online services via its mobile apps. The OneDrive app, for example, offers a certain amount of storage for free, but customers can pay to sign up for more. The Office Mobile app lets users subscribe to Office 365 via in-app purchases. Little wonder, then, that Microsoft would consider reducing its patent tax if device makers are willing to play ball.

The most recent Android vendor to agree to Redmond's terms – and one of the biggest – was Samsung. The Korean firm caved in February, despite having claimed that Microsoft's purchase of Nokia's devices and services business had invalidated its earlier license agreement.

And whaddaya know? Just a month later, Samsung announced that it would begin distributing Microsoft's mobile apps, both as components of its Knox Workspace security platform and preinstalled on some devices. It could just be a coincidence, but what are the odds?

Around the time of Sammy's announcement, Microsoft said it had signed on a number of other global partners to ship its apps. Dell and Taiwanese electronics maker Pegatron were the most prominent, with the others being small, regional OEMs.

Your humble Reg hack suggests that we will likely be seeing more major-brand kit arrive with Redmond's mobile apps preinstalled – even if carriers choose to wipe them off before putting the devices in consumers' hands. ®


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