Microsoft has signed a handful of licensing agreements with Android manufacturers, but is the move intended to drive revenue in mobile or get Windows Phone 7 more voice at the table?

Microsoft has licensing agreements with HTC, General Dynamics Itronix, Onkyo, Velocity Micro and Wistron for mobile phone patents used in the manufacture of Android devices. While the HTC deal was signed last year the other agreements all happened more recently.

?I don?t think Microsoft is in this for the money ? they are in it for the leverage in winning share for Windows Phone 7,? said Charles Golvin, a principal analyst at Forrester Research, Cambridge, MA.

 It is possible Microsoft could tell manufacturers it will lower the Android-related licensing fees if they commit to produce a certain volume of Windows 7 devices, Mr. Golvin speculated.

?There is plenty of precedence in mobile for companies engaging in intellectual property horse-trading in order to get the best value terms.,? he said.

It is possible Microsoft could tell manufacturers it will lower the Android-related licensing fees if they commit to produce a certain volume of Windows 7 devices, Mr. Golvin speculated.

Catch up
The issue for Microsoft is that the Windows 7 phone is far behind Apple and Google in the device wars.

?Our numbers show that Windows Phone 7 has not really made much of an impact on the market so far,? Mr. Golvin said. ?Also, Microsoft is not showing evidence of expanding commitment from their OEMs.?

The one or two Windows Phone 7 phones available from most carriers today is in stark contrast to the number of Android devices currently being offered, per Mr. Golvin.

The HTC licensing deal, which was made last year, is the one that is the most significant for Microsoft because of the volume involved. The other deals, while significantly smaller in terms of volume, are still meaningful.

?Every one of these deals helps from the perspective of giving Microsoft a little bit more ammunition,? Mr. Golvin said.

However, what really matters is Microsoft?s ability to sign licensing deals with manufacturers of scale. Since HTC is the only one so far, it is possible Microsoft will be looking to strike similar deals with other Android manufacturers such as Samsung.

Impact on Android
The moves by Microsoft to collect licensing fees off Android devices could impact Google.

?One of the ways that OEMs have been able to reduce the cost for Android devices is because they are not paying a licensing fee to Google,? Mr. Golvin said.

?Microsoft?s ability to command licensing fees from each OEM is closing the gap,? he said.

For Microsoft, the strategy may also be a way to grab a bigger piece of the quickly growing mobile pie.

?The Windows phone is available but for those that choose not to use Windows, the question for Microsoft is is there another revenue opportunity,? said Jeff Orr, senior practice director for mobile devices at ABI Research, New York.

?The answer is yes, with licensing becoming another one of those areas to consider outside of its own branded solution,? he said.

Licensing is a fairly normal play for any technology company.

?Any company that has technology leadership is going to look to sell that capability and look to licensing to get the most out of their investment,? Mr. Orr said.

Final Take
Chantal Tode, Assoc. Editor, Mobile Marketer

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