MS-Android

I don’t see what all the fuss is about. Nokia is producing some Android/Linux smartphones “Within Microsoft what I see happening is that the company will start backing off Windows Phone. Kendrick’s right, you see. It is too much to ask Microsoft to support two mobile operating systems, so I think they’ll slowly and quietly drop the least-profitable of them: Windows Phone.”that look and feel like “phoney 7” smartphones. Certainly, it is interesting that Android/Linux apps will run on them, but this is just like GNU/Linux distros that look like XP or “7”. No one is very excited about those…

I don’t often disagree with SJVN but I think his argument that M$ makes $billions from Android/Linux taxes is extreme. If that were happening, there would be some mention of it in M$’s SEC filings. There’s only this, “D&C Licensing, comprising: Windows, including all original equipment manufacturer (“OEM”) licensing (“Windows OEM”) and other non-volume licensing and academic volume licensing of the Windows operating system and related software (collectively, “Consumer Windows”); non-volume licensing of Microsoft Office, comprising the core Office product set, for consumers (“Consumer Office”); Windows Phone, including related patent licensing; and certain other patent licensing revenue;”. Would M$ dare risk not mentioning something substantial here? I don’t think so. Their case against Motorola is still up in the air: “Motorola litigation
In October 2010, Microsoft filed patent infringement complaints against Motorola Mobility (“Motorola”) with the International Trade Commission (“ITC”) and in U.S. District Court in Seattle for infringement of nine Microsoft patents by Motorola’s Android devices. Since then, Microsoft and Motorola have filed additional claims against each other in the ITC, in federal district courts in Seattle, Wisconsin, Florida, and California, and in courts in Germany and the United Kingdom. The nature of the claims asserted and status of individual matters are summarized below.
International Trade Commission
In May 2012, the ITC issued a limited exclusion order against Motorola on one Microsoft patent, which became effective on July 18, 2012. Microsoft appealed certain aspects of the ITC rulings adverse to Microsoft, and Motorola has appealed the ITC exclusion order, to the Court of Appeals for the Federal Circuit. In October 2013, the Court of Appeals ruled in Microsoft’s favor on one additional patent (since expired) and, in December 2013, affirmed the ITC’s exclusion order.
In July 2013, Microsoft filed an action in U.S. District Court in Washington, D.C. seeking an order to compel enforcement of the ITC’s May 2012 import ban against infringing Motorola products by the Bureau of Customs and Border Protection (“CBP”), after learning that CBP had failed to fully enforce the order.
In November 2010, Motorola filed an action against Microsoft in the ITC alleging infringement of five Motorola patents by Xbox consoles and accessories and seeking an exclusion order to prohibit importation of the allegedly infringing Xbox products into the U.S. At Motorola’s request, the ITC terminated its investigation as to four Motorola patents, leaving only one Motorola patent at issue. In March 2013, the administrative law judge (“ALJ”) ruled that there has been no violation of the remaining Motorola patent. Motorola sought ITC review of the ALJ’s determination, which the ITC denied in May 2013. Motorola has appealed the ITC’s decision to the U.S. Court of Appeals for the Federal Circuit.
U.S. District Court
The Seattle District Court case filed in October 2010 by Microsoft as a companion to Microsoft’s ITC case against Motorola has been stayed pending the outcome of Microsoft’s ITC case. In November 2010, Microsoft sued Motorola for breach of contract in U.S. District Court in Seattle, alleging that Motorola breached its commitments to standards-setting organizations to license to Microsoft certain patents on reasonable and non-discriminatory (“RAND”) terms and conditions. Motorola has declared these patents essential to the implementation of the H.264 video standard and the 802.11 Wi-Fi standard. In the Motorola ITC case described above and in suits described below, Motorola or a Motorola affiliate subsequently sued Microsoft on those patents in U.S. District Courts, in the ITC, and in Germany. In February 2012, the Seattle District Court granted a partial summary judgment in favor of Microsoft ruling that (1) Motorola entered into binding contractual commitments with standards organizations committing to license its declared-essential patents on RAND terms and conditions; and (2) Microsoft is a third-party beneficiary of those commitments. After trial, the Seattle District Court set per unit royalties for Motorola’s H.264 and 802.11 patents, which resulted in an immaterial Microsoft liability. In September 2013, following trial of Microsoft’s breach of contract claim, a jury awarded $14.5 million in damages to Microsoft. Motorola has appealed.
Cases filed by Motorola in Wisconsin, California, and Florida, with the exception of one currently stayed case in Wisconsin (a companion case to Motorola’s ITC action), have been transferred to the U.S District Court in Seattle.”

There’s not much there, IMHO. Even M$ calls Motorola’s patent charge “immaterial”. Those are on the same magnitude as M$’s patent claims are they not? The fact is that the producers of Android/Linux devices that have settled with M$ did so to avoid litigation and the amounts are likely less than the cost of litigation, $millions not $billions. Google is not backing down and could well win against M$ in a big way. M$ is not considering that revenue in its manipulation of Nokia. This is all about the applications, nothing more. That UI looks like M$’s phoney OS to me and to users. M$ doesn’t charge itself licensing fees so using Android/Linux is not about saving money on licensing just cost of production and importing apps. When they ship standard Android, then we can believe that M$ plans to migrate to */Linux one way or another, not before. That isn’t going to happen as long as Gates and Ballmer are around. That isn’t going to happen until the whole house of cards falls.

See Hello, MS-Android. Good-bye, Windows Phone.

About Robert Pogson

I am a retired teacher in Canada. I taught in the subject areas where I have worked for almost forty years: maths, physics, chemistry and computers. I love hunting, fishing, picking berries and mushrooms, too.

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5 Responses to MS-Android

  1. Swapnil Bhartiya says:

    M$ choose to ‘settle’ with B&N and actually ‘paid’ B&N to drop the case as it was about to expose that MS patent accusation are BS. I do trust that Android players have patent deals with M$ but those are at most about FAT support that they need for SD cards. And MS is not getting more than few dimes per such unit. IFF MS was minting billion companies like Samsung would have fought back. Its PURE BS which even friends like SJVN are falling for.

  2. wolfgang wrote, “too many people saying that Microsoft is getting lot of euros from Samsung and others. must be true.”

    Do the maths.

  3. wolfgang says:

    …boast about license revenue…

    if famous business analyst Sherlund correct and you wrong it is because Microsoft is using revenues to cover up holes in other lines. too many people saying that Microsoft is getting lot of euros from Samsung and others. must be true.

  4. wolfgang wrote, “maybe you know more than Sherlund. maybe not.”

    I know it is a serious offence to hide material facts from the SEC. Besides that, why would M$ hide the numbers unless they were insignificant? They like to boast every 100million licences or so. Why not boast every $billion in patent-licence revenue? Devices and Consumers actually showed a decrease in licensing revenue for Q4 of 2013 compared to Q4 of 2012. How could that happen if Android/Linux is taking off like a rocket and M$ is taxing it heavily? The money’s just not there.

    M$ did mention a pop in licensing back in June, 2013 in their 10-K. Basically they showed $1.2billion increase in revenue due to more sales of phone “7” and Android/linux licensing over a whole year in which hundreds of millions of Android/Linux devices were sold. Assuming a bit, about a third of that was Phoney “7” licensing. That leaves $800million as Android/Linux licensing and a bunch of other revenues from Phoney “7” like app store and advertising. Their “tax” on Android/Linux is $1 or $2, something like that. They charge something like $20 for Phoney “7” so this is barely significant.

  5. wolfgang says:

    …millions or billions…

    say it aint so joe! you wishing or just hoping? big noise Rick Sherlund at Normura is saying that Microsoft getting a couple of billion from android each year and lumping with mobile and xbox money to hide sorry performance there. maybe you know more than Sherlund. maybe not.

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