Quanta to pay Microsoft Android fees

INTELLECTUAL PROPERTY LICENSING: Some analysts believe Microsoft earns more through licensing to Android smartphone makers than through its Windows Phone OS

By Jason Tan / Staff Reporter





Quanta Computer Inc (廣達), the world’s largest contract notebook PC maker, has signed a patent licensing agreement with Microsoft Corp, in which it would pay royalties to the software giant when it produces tablets, smartphones or other consumer devices running Android or Chrome platforms.

Microsoft made the announcement on Friday in a statement, without revealing the licensing fee.

That means Quanta is following in the footsteps of other Taiwanese hardware makers, such as HTC Corp (宏達電), Wistron Corp (緯創) and Acer Inc (宏碁), South Korea’s Samsung Electronics Co and the US’ ViewSonic and Velocity Micro Inc, as well as Japan’s Onkyo Corp, in paying royalties to Microsoft to use the two open platforms developed by Google Inc.

According to the Chinese-language Commercial Times, Quanta is the contract maker of the PlayBook from Research In Motion Ltd and the Kindle Fire from Amazon, and has to pay royalties for both.

The paper cited industry estimates that Microsoft will make between NT$500 million (US$16.5 million) and NT$1 billion in royalties from Quanta this year based on the expected combined shipments of 6 million units of the PlayBook and Kindle Fire.

The calculation was derived from HTC’s reportedly paying between US$2 and US$5 per Android smartphone to Microsoft, the paper said.

Since Microsoft launched its intellectual property (IP) licensing program in December 2003, the company has inked more than 700 licensing agreements.

“We are pleased to have reached this agreement with Quanta, and proud of the continued success of our Android licensing program in resolving IP issues -surrounding Android and Chrome devices in the marketplace,” Microsoft Intellectual Property Group vice president and deputy general counsel Horacio Gutierrez said in the statement.

HTC, the world’s No. 5 smartphone brand, in April last year said it would pay Microsoft to license a series of patents that cover technology in HTC cellphones that use Google’s popular Android operating system.

Microsoft has declined to say which of its patents are relevant to Android and Chrome.

According to IDG News, some analysts have speculated that Microsoft is potentially earning more revenue through licensing to Android smartphone makers than it is through licensing its Windows Phone operating system.

That is because IDG projected Android to have a 39.5 percent of the smartphone operating system market share this year, compared with 5.5 percent for Windows Phone.

Microsoft, which says that Android infringes its patents, is suing Motorola Mobility and Barnes & Noble, the maker of Nook e--readers, on the IP violation issue.