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Microsoft Earns $2 Billion Per Year From Android Patent Royalties?
- deleted 13y ago[deleted]
- nemothekid 13y agoOf that, $2 billion in losses are attributable to the Xbox platform. Wow, I would have never imagined the Xbox division to be in dire straits.
- rayiner 13y agoMicrosoft and Sony have lost $3-5bn on the PS3/XBox 360-generation of consoles.
- runn1ng 13y agoWhy do they keep doing something that costs them so much?
- pmjordan 13y agoSony won the Blu-Ray vs HD-DVD war with the PS3. That may have been worth it. Microsoft want to wrest control over your living room from the established consumer electronics companies (such as Sony...), much like Apple and Amazon.
- nl 13y agoRazor, Blades. Microsoft: Halo Series has Generated $3 Billion in Revenue http://www.gamepolitics.com/2012/10/31/microsoft-halo-series-has-generated-3-billion-revenue http://www.gamepolitics.com/2012/10/31/microsoft-halo-series...
- Steko 13y agoI've seen several "analysts" making this claim but they invariably include the original xbox losses in an effort to to make the profitable 360 business look bad. Examples: http://www.neowin.net/images/uploaded/asfd3221125511352.jpg http://www.neowin.net/images/uploaded/asfd3221125511352.jpg http://g.foolcdn.com/img/editorial/xbox%20biz.png http://g.foolcdn.com/img/editorial/xbox%20biz.png
- mtgx 13y agoI don't think Microsoft has ever made a profit on Xbox, although I'm sure they've split up and distributed its losses to all sorts of divisions to hide that. They're about to do the same with Bing, too, now.
- leokun 13y agoSo why do they make the xbox? Why are they making another one?
- hackinthebochs 13y agoThey're still fighting for the supposed set-top-box future that has been predicted for the last 15 years. Maybe this generation....
- bobbles 13y agoIt's a bank that only makes change! How does it make a profit? Volume!
- sleepydog 13y agoAre you sure? I remember reading that they make a ton of money on Xbox Live subscriptions.
- seanmcdirmid 13y agoI believe the claim goes that investment is still greater than money earned on the xbox ecosystem. It sounds plausible, but I don't know if it's true.
- tsycho 13y agoIf these numbers are accurate, then yuck!!! My disgust for software patents just went up even further. More seriously, I have a question for those who know more about this... 1. Are these generic, broad "idea" patents and hence there is nothing Google/OEMs can really do here to avoid licensing them? If not, why don't they use an alternative implementation to avoid the conflict? 2. If the answer to #1 is yes, how does Apple avoid this problem? Are they also licensing from Microsoft? Or is Apple in some sort of a mutual cross-licensing agreement here to fight the common enemy Google?
- VladRussian2 13y ago>1. Are these generic, broad "idea" patents and hence there is nothing Google/OEMs can really do here to avoid licensing them? If not, why don't they use an alternative implementation to avoid the conflict? no alternative implementation would help as it is not about some specific patents, it is more about [litigation] threat that some patents in the vast portfolio can be found that may be in some sense considered violated. Basically it is racket called Android Licensing Program - you pay "protection money" to MS in exchange for it not bothering you. What interesting here is that Google seems to leave its OEMs to fend for themselves, thus instead of fighting one Google over 2B/yearly pot (the show that first row tickets for would sell like for Superball), MS extorts fifty million here and hundred million there which is much easier and safer.
- masry 13y agoSorry but this sounds like bullshit to me. By that logic Microsoft could get money from anyone who's ever made a software product because "some patents in the vast portfolio can be found that may be in some sense considered violated." I buy the other argument more, the one that says Android does horribly infringe on Apple's and Microsoft's patents because it's a copied product and that's what happens when you make a copied product.
- thetrb 13y agoDo they also get money from Motorola?
- jonathansizz 13y agoEarn (verb): 'gain or incur deservedly in return for one's behavior or achievements.' So why change the article's title, HN?
- phaemon 13y agoIt's actually the title in the <title>, even though it's not the title of the article. I agree that "earns" is a poor choice of words...
- AJ007 13y agoHow much money is Ubuntu and Firefox budgeting for patent licenses on their mobile OS?
- bdcravens 13y agoNone, as neither will be producing hardware it looks like. Microsoft is going after handset makers, not Google.
- mtgx 13y agoHow can a company so shamelessly extract money (through forceful deals, no doubt) from an open source OS, and get away with it? Linux companies dodged this bullet for the most part, from both Microsoft and SCU, but it seems Microsoft "succeeded" this time against Android with their mostly garbage patents in the same way patent trolls and mass-bittorrent lawsuits have succeeded so far - by scaring people/companies into paying up, without having to get into any lawsuit, which is exactly what patent trolls have been doing for a while. As soon as B&N was about to invalidate some of their main patents, they quickly "invested" $300 million into B&N (i.e. they settled), and B&N dropped the lawsuit. I wish more OEM's would've had the balls to call their bluff. So EFF - any proposals for stopping corporate patent trolls like Microsoft, Rockstar Consortium and Intellectual Ventures, yet?
- zmmmmm 13y ago> Linux companies dodged this bullet for the most part, from both Microsoft and SCU It's worth noting that many of the patents asserted in the B&N case had nothing to do with mobile and were equally applicable to any form of Linux. The only reason MS did not assert them to quell Linux adoption is a) they did not need to and b) it would have been seen as anti-competitive. As such we've been kind of lulled into a false sense of security about the huge stockpile of stupid patents these early operating systems companies have built up. It's more or less like nuclear waste - lying around waiting for someone to build dirty bombs with it. And of course, since there is a clock ticking on the expiry of the patents, MS and others will start becoming increasingly keen to deploy them if only to extract value before the expiry.
- Goronmon 13y agoHow can a company so shamelessly extract money (through forceful deals, no doubt) from an open source OS, and get away with it? It's as simple as 'software patents'. This is the result of the current system.
- ChrisAntaki 13y agoMy guess is that the device manufacturers see some legitimacy to Microsoft's claims, or at least fear a judge would. Perhaps if all the manufacturers banded together, well mainly Samsung, they could fight it. But if that would have been profitable, I'd assume it would have happened by now.
- adrianlmm 13y agoYou gotta be kidding me.
- Oletros 13y agoI like when some staimate from some analyst without any real figure is stated as a fact
- zmmmmm 13y agoHopefully - and I really hope this - most of these patents are stupid stuff from the early days of graphical operating systems and are ready to expire in the next few years (given a 20 year lifespan for most patents).
- nickff 13y agoThis thought is a "triumph of hope over experience", (as was said of second marriages by Samuel Johnson).
- marcosdumay 13y ago> given a 20 year lifespan for most patents From what I've read, in the US a patent is valid until 20 years after it is granted, retroactive to the date that it's filled. That can be a 40 years interval, or more, if the USPTO don't do it's job well (and I know of patents that did go over 30 years).
- AnthonyMouse 13y agoThe US patent term is 20 years from filing as of June 8, 1995. Previous to that it worked as you describe, with a term of 17 years from issuance. The trouble, of course, is that we're still in that window. A patent filed in 1994 but not issued for many years thereafter may still be in effect.
- leeoniya 13y agodoes anyone know which patents they're asserting? FAT?
- rbanffy 13y agoBarnes and Noble tried to make the list public. They got, IIRC, a billion dollars and a "partnership" (mostly the money) in exchange for shutting up. AFAIK, the list is still secret.
- leeoniya 13y agonow this is completely and utterly fucked up
- killme 13y agoWrong, here's the list. http://www.networkworld.com/news/2011/070611-microsoft-android.html?page=2 http://www.networkworld.com/news/2011/070611-microsoft-andro...
- killme2 13y agoThat's not true and has turned into something of an urban legend with uninformed people repeating the claim. Here is the list http://www.networkworld.com/news/2011/070611-microsoft-android.html?page=2 http://www.networkworld.com/news/2011/070611-microsoft-andro...
- throwawaykf02 13y agoAlso, by my dangerously semi-informed understanding, B&N's defense looked really weak (see previous comment on same topic: https://news.ycombinator.com/item?id=6540902 https://news.ycombinator.com/item?id=6540902). I'd still like a real attorney to weigh in on my opinion, though. So I really don't buy the "B&N scared Microsoft into bribing it" story. To me, it seems more like a "B&N tried a Hail Mary shot at getting an antitrust thing going against Microsoft, and when that failed miserably, they sold a cheap stake in their ebook business" story. Consider that ebook content is something Microsoft's ecosystem didn't (and still does not) have compared to Apple, Google and Amazon's ecosystems. Consider also that this ebook content comes without the lawsuits and publisher-wrangling the others had to go through. So, $300M for a quick entry into a market where its competitors are incumbents seems like Microsoft got a pretty decent deal, and I think that patent lawsuit provided leverage.
- dkd903 13y agoWho pays these monies to Microsoft? Google?
- IBM 13y agoThis might be more than what Google earns from Android.
- bdcravens 13y agoPossibly more than Microsoft earns from Windows Phone.
- shmerl 13y agoA clear demonstration that patent racket is a lucrative "business".
- Touche 13y agoThe mobile phone business is essentially a cartel where only very big players are able to enter the market. Why is this allowed to exist? I couldn't start my own company and compete in this space.
- sker 13y agoI always thought HTC and Samsung were exempt from these royalties by releasing their own Windows Phones. That's why Samsung doesn't care at all about their WP offerings. Samsung, HTC, Apple and Nokia should account for over 50% of the global market. If my assumptions are correct, are the rest of the smaller players able to pay that much money on royalties alone? I'll like to see some numbers. The article is seriously lacking data.
- objclxt 13y ago> I always thought HTC and Samsung were exempt from these royalties by releasing their own Windows Phones Samsung definitely pay a per-device royalty to Microsoft for Android devices, the latter even put a press release out about it a few years ago: http://www.microsoft.com/en-us/news/press/2011/sep11/09-28samsungpr.aspx http://www.microsoft.com/en-us/news/press/2011/sep11/09-28sa...
- rbanffy 13y agoThere are all sorts of creative accounting maneuvers that can be done in order to hide the amount exchanging hands for various purposes. They can be exempt and still pay and then to be reimbursed (or receiving a heavy discount somewhere else they buy Microsoft licenses. Samsung buys a lot of Windows licenses for their PC business.
- corresation 13y ago...claims analyst, with absolutely nothing backing up their claim. The headline appears as if Microsoft accountants stated this as a fact, when in reality this is someone essentially reading tea leaves. Further it's worth noting that the division that these Android royalties are attributed to also garners all other patent licensing royalties of any sort (e.g. FAT), as well as licensing charges such as ActiveSync licensing (ergo, every iPhone, among others).
- iamshs 13y agoExactly. Rick Sherlund has a history of saying that Microsoft should be divided up, and Xbox should definitely be spun off [1, 2, 3]. He even said Samsung should take over Xbox division [4]. Even if MS earns $1 Billion from patents that exclude "legitimate" licensing, I think that would be a big number and definitely should be looked into. [1] - http://www.geekwire.com/2013/sherlund-microsoft-should-consider-selling-xbox-bing-businesses/ http://www.geekwire.com/2013/sherlund-microsoft-should-consi... [2] - http://money.cnn.com/2013/06/03/technology/enterprise/microsoft-breakup/ http://money.cnn.com/2013/06/03/technology/enterprise/micros... [3] - http://www.gamesindustry.biz/articles/2013-06-03-microsoft-would-exit-the-games-business-before-selling-xbox-division http://www.gamesindustry.biz/articles/2013-06-03-microsoft-w... [4] - http://www.examiner.com/article/sherlund-microsoft-needs-to-deal-xbox-one-department-to-samsung http://www.examiner.com/article/sherlund-microsoft-needs-to-...
- ngoel36 13y agoMicrosoft's divisions (most notably Xbox) have always had a huge dilemma: Do we act in a way that's best for our division, or do we maximize value for MSFT. From my time at Xbox, I can say with certainty that the implied actions for each choice are often not the same.
- amitagrawal 13y agoI think (and a lot of other would agree with me on this) that the Xbox division within Microsoft is the most customer-centric of any company in the entire world. The people at Xbox are die hard gamers who really want to help you solve your problem whatever it might be. I don't know if spinning off one of the best divisions would be such a smart division specially when it is already profitable, unlike Bing.
- padobson 13y agoI'm not surprised the XBox division is bleeding so much cash. Microsoft should never have gotten into the hardware business in the first place. Every time they release a new piece of hardware is cause for a face-palm. 15 years ago, when no console maker had a viable strategy for going online, MS should have built a cross platform solution that made online gaming possible for every console. Does that sound familiar? A cross-platform solution for a number of competing hardware makers? This division would probably be a huge part of Microsoft's business if they had pulled it off. Just think of the leveraging possibilities if every gamer over the age of 25 had an XBox live account, instead of the much smaller subset of gamers over 25 who also owned a Microsoft console. I think they're back on the right track with Windows phone, but Google already beat them to the cross-platform solution.
- Maascamp 13y agoWhy is everyone taking these numbers as fact when neither the article nor analyst offer anything to back up these claims? The people submitting and upvoting stories like this are just as responsible for the shoddy state of tech journalism as these bloggers are.
- AshleysBrain 13y agoWith software, is it out of the question to re-engineer the code so it no longer needs licensing? Why hasn't Android already done that?
- oh_sigh 13y agoProbably because some patents are so broadly written that they cover every conceivable implementation.
- w4 13y agoThe problem is, frequently, the patents aren't on something you can engineer around; they're on a very broad idea and not on any specific implementation, e.g. pull to refresh. If you want to implement an interface that pulls down to refresh then you're technically infringing on Twitter's patent on it (though they have chosen not to enforce it). My understanding is there's no good way to engineer around it if you want the interface to pull and refresh. Granted, you can get around that one with a button that refreshes, but what if the patents is, say, on "operating system provided tabs"? Or on "plotting search results on a map"? Or on "communicating multi-part messages"? Now you have a problem, and you're going to have to pay licensing fees since you need those things just to create your mobile OS. The other problem has less to do with the patents themselves and more to do with the legal system surrounding them: it's incredibly expensive and quite risky to litigate software patent disputes. You're dealing with a court system that doesn't necessarily fully understand technical matters, leaving the outcome of litigating ambiguous even in the best of cases (and keep in mind that a loss could potentially end your entire product, since the courts could order that you must pay an extremely onerous licensing fee or cease infringing, either of which probably means closing up shop), and the cost of litigation is enormous. It's usually wiser just to settle for an acceptable licensing agreement than it is to try to engineer around the problem and fight the ensuing lawsuit by asserting that your solution is not subject to the patent.
- zmonkeyz 13y agoDre Day only made Easy's pay day...