Microsoft cutting Android fees in return for app bundling – report

Microsoft cutting Android fees in return for app bundling – report

17 APR 2015

Microsoft is offering to cut the patent fees it charges Android device makers in return for bundling apps such as Office, OneDrive and Skype with smartphones and tablets, according to research originating from the Taiwanese supply chain.

It is not the first time that such a strategy has been suggested: when Samsung started bundling Microsoft apps with its Galaxy products shortly after settling a patent dispute with the computing giant, it was swiftly suggested that there was a strong probability of a link.

Now DigiTimes Research said that deals announced at the same time, with Dell and Pegatron as well as regional manufacturers OEMs including TrekStor, JP Sa Couto, Datamatic, DEXP, Hipstreet, QMobile, Tecno and Casper, feature similar terms.

With Android shipments increasing, Microsoft has seen a fair degree of success monetising patents it said need to be licenced by device makers using the Google platform. However, it now seems that rather than further exploiting this revenue stream, it would rather see a greater reach for its core products and services – with pre-install deals with vendors a good way of doing this.

At the time the deals were announced, Peggy Johnson, EVP of business development for Microsoft, said that “we see an opportunity to turn our focus to our device partners — easing mobile access to great apps and services for customers by pre-installing them directly on the device”.

DigiTimes Research also noted that with Android hardware margins heavily pressured, the Microsoft deal is likely to be an appealing way to cut costs, even without taking into account any benefits from including Microsoft’s software.

Interestingly, it was reported this week that some US operators were shipping Samsung smartphones that did not feature Microsoft’s software pre-installed, although there does not seem to be a clear reason why.

And, with Google’s practices with Android currently under investigation by the EC, vendors working with Microsoft probably works in its favour. The search giant could legitimately argue that Android is enabling opportunities for its key rivals if Microsoft gains a growing foothold in the Android apps and services market – even if this has been achieved by the back door.


Steve Costello

Steve works across all of Mobile World Live’s channels and played a lead role in the launch and ongoing success of our apps and devices services. He has been a journalist...More

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