Think about it.
Nary a day seems to go by without a report here or there of one or some other Android or Chromebook OEM fast becoming a signatory to a compact with Microsoft over Android.
Mind you, these agreements aren’t just of the “Sorry, I transgressed; forgive me” type. They are backed by real money.
Real money.
Word in the blogosphere has the amounts of tribute being paid to Microsoft from these hardware OEMs ranging from a minuscule $5.00 USD per device from HTC, one of the first signatories, to about $15 from the likes of Samsung, Hon Hai (Foxconn), and ZTE.
What, you sneeze at the lowly amounts?
Listen, those amounts are pure gravy.
Earlier today, I read an article when estimates that Microsoft could be taking in as much
as $8.8 billion USD from Android licensing alone in coming years.
$8.8 Billion.
Yearly.
That's a lot of moola!
Let us discount the metrics used by the estimators as too sunny, and go scorched earth, choosing half of the estimated revenues.
50% of the projected amount would still be a lot, about equal to the sales of 127 million Windows licenses at $35 per license.
And remember, this money is a) recurring, and b) for IP that Microsoft already owns, not new research!
No wonder Microsoft is making sure that it's services connect with Android!
I had complained bitterly not quite a fortnight ago that Microsoft was seeding Outlook to Android before Windows 8 Metro. Now, I understand why. I don’t like it, but the business reasons are very sound.
And I mentioned so on Facebook.
As to the question why doesn’t Microsoft just quit making phones, the answer is rather simple: branding.
To explain: the reason is that these OEMs, while paying the licensing fees, are not doing so willingly, and most definitely not happily. They are doing this to create a state of détente, and you can bet that they are furtively or openly looking to change the status quo.
They are chaffing under what they think is the Microsoft [Android] yoke, would want to make a change as soon as they can. Once they can, Microsoft would be relegated to being a licensing authority, and quite ripe for disintermediation.
Think of the predicament of Kodak today.
For a long while, Kodak got fat on licensing patents & IP. Then film cameras went away. Today, none of my kids remember or know what Kodak is, or meant, to consumers, technology, and most unfortunately, photography. And Kodak is in bankruptcy.
Sadly, once-mighty Kodak now epitomizes irrelevancy!
Microsoft needs to continue to try to improve Windows Phone in order to maintain a presence not just in mobiles, but in mindshare.
Look what iTunes, followed by iPod have don’t to make Apple this planet's most profitable company.
In other words, the licensing fees allow Microsoft to develop new products and services. Moreover, it helps offsets the remarkably large investments in R&D that Microsoft makes yearly.
Irony: the very tool that Google created to kill off Windows, will now be used by Microsoft to diminish the Android’s impact, and prepare Microsoft for the next era in computing.
© 2002 – 2013, John Obeto for Blackground Media Unlimited
