Samsung Will Pay Microsoft Royalties on Android Devices

Samsung Android & Windows Phone 7 device

Samsung has entered an agreement with Microsoft to cross-license the patent portfolios of both companies. The agreement also dictates that Samsung pay Microsoft an undisclosed licensing fee for every Android mobile phone and tablet it sells.

Given the popularity of the platform, the additional cost will probably not hinder the Korean electronics giant from making more Android devices going forward. However — as the companies also agreed to work together in the development and marketing of Windows Phone — Samsung may have to perform a balancing act on the amount of resources it allocates for both the platforms.

In addition, Samsung will be in an awkward situation when Google releases its first Android phone through Motorola Mobility.

As reported on one of Microsoft’s TechNet blogs, Redmond has similar agreements with six other Android OEMs in the past three months: Acer, General Dynamics Itronix, Onkyo, Velocity Micro, ViewSonic and Wistron. The agreement with Samsung is a major win, since Samsung is one of the biggest Android OEMs around.

Microsoft had entered an agreement with HTC last year. Now it will receive a steady stream of royalties since HTC and Samsung are responsible of over half of all Android devices in the U.S. market.

Here’s the press release:

REDMOND, Wash — Sept. 28, 2011 — Microsoft announced today that it has signed a definitive agreement with Samsung Electronics Co. Ltd., to cross-license the patent portfolios of both companies, providing broad coverage for each company’s products. Under the terms of the agreement, Microsoft will receive royalties for Samsung’s mobile phones and tablets running the Android mobile platform. In addition, the companies agreed to cooperate in the development and marketing of Windows Phone.

“Microsoft and Samsung see the opportunity for dramatic growth in Windows Phone and we’re investing to make that a reality,” said Andy Lees, president, Windows Phone Division, Microsoft. “Microsoft believes in a model where all our partners can grow and profit based on our platform.”

“Through the cross-licensing of our respective patent portfolios, Samsung and Microsoft can continue to bring the latest innovations to the mobile industry,” said Dr. Won-Pyo Hong, executive vice president of global product strategy at Samsung’s mobile communication division. “We are pleased to build upon our long history of working together to open a new chapter of collaboration beginning with our Windows Phone “Mango” launch this fall.”

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