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Microsoft earns $1bn per year from Samsung

News by Luke Jones on Saturday October 04, 2014.

microsoft news · industry news · luke jones

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Microsoft may not be raking in the cash from its own mobile output, but the company is doing pretty well from everyone else. Ironically, the software giant started to focus on hardware to keep pace with rivals, but the company's hardware has not sold well, while its mobile software continues to be a money spinner. The latest news is that Samsung paid Microsoft $1 billion last year in patent royalties, but the Korean company is looking to end the payments.

Earlier in the year it emerged that Microsoft rakes in billions of dollars from Android patent licenses, and it seems the same is true from Samsung. So, hardware wise Microsoft is not doing well, but hey Samsung's cool $1 billion can pay off the Surface tablet inventory Redmond wrote off last year to that cost.

The Samsung and Microsoft agreement was penned way back in 2011 when Samsung was just another name in the crowd. The company has since emerged as the major brand in the smartphone world, selling more handsets than any other and having a vastly bigger range of devices. However, as a few lost court cases against Apple shows, Samsung prefers not to pay for the use of other people?s tech and is now trying to get out of the deal.

Microsoft is inevitably taking Samsung to court, demanding the agreement continue and for the Korean giant to cough up $6.9 million it still owes from last year. Microsoft Deputy General Counsel David Howard said:

We are confident that our case is strong and that we will be successful. At the same time, Microsoft values and respects our long partnership with Samsung, is committed to it, and expects it to continue.

Samsung is countering that Microsoft's acquisition of Nokia nullifies the cross licensing agreement and so it should not have to pay. I can certainly see why Microsoft wants to maintain this revenue stream as I imagine it helps to prop up its mobile business. The courts will now decide which company is right on this matter, although considering Samsung's history in these types of cases I imagine Microsoft will be feeling quietly confident.

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About the author

Luke Jones
Luke Jones is the Managing Editor at MobileBurn.com and is the person you need to speak to about the content on the site. Luke studied creative writing at degree level before carving out a reputation as a freelance tech writer. He settled here at MobileBurn, where he reviews devices and contributes to the news, as well as overseeing the site's content and direction.

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