Late last week, Microsoft sued Motorola alleging that it’s lineup of Droid smartphones, which make use of Google’s Android OS, infringe on a number of Microsoft’s patents pertaining to synchronization of data such as email and contacts, along with patents which cover how applications are notified of changes in signal strength and battery power.
Microsoft, of course, has been struggling to stay relevant in a smartphone market that has largely passed them by ever since Apple released the iPhone in June 2007. The upcoming release of Windows Phone 7 signifies their latest effort, and perhaps final opportunity, to reclaim a position it let slip through its fingers in the blink of an eye. Licenses for Windows Phone 7, however, cost hardware manufacturers money, which makes free licenses from Android all the more appealing. Now using Android isn’t completely free if handset manufactures want to make full use of Android, but it still comes out cheaper than doing business with Redmond. That said, Microsoft finds itself in a precarious position where it not only has to compete with sleek hardware from the likes of Apple and HTC, but with a relatively cheap software offering from Google.
So how does this backstory factor into Microsoft’s recent lawsuit against Motorola? Well, Microsoft CEO Steve Ballmer apparently believes that Microsoft is entitled to licensing fees on every Android handset sold. Remember, it wasn’t all that long ago that Microsoft struck a licensing deal with HTC whereby HTC pays royalties over to Microsoft for the ability to ship handsets running Android.
Below is an excerpt of a Ballmer interview with the Wall Street Journal;
WSJ: You’re still charging a license fee for the software.
Mr. Ballmer: Sure.
WSJ: Is that difficult in an environment where Android is free?
Mr. Ballmer: Android has a patent fee. It’s not like Android’s free. You do have to license patents. HTC’s signed a license with us and you’re going to see license fees clearly for Android as well as for Windows.
WSJ: It doesn’t seem like the license fee alone is a big financial opportunity for Microsoft.
Mr. Ballmer: It’s one of the opportunities. One.