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Samsung hedges Android bets, teams up with Microsoft

Samsung?s agreement to help Microsoft develop and market Windows Phone is a sign that the OEM is looking to hedge its bets now that Google has acquired Motorola.

With Google having its own handset maker and a big partner in Android under its own roof, other Android handset manufacturers  such as Samsung are wondering what this means for them . Samsung also agreed to pay Microsoft royalty fees for Samsung?s mobile phones and tablets running the Android platform.

?With the uncertainty injected into the Android space with Google?s Motorola acquisition, you could see this in light of Samsung trying to hedge its bets a little,? said Noah Elkin, Austin, TX-based principal analyst at eMarketer.

?Samsung is clearly working across all of the leading competitive operating systems,? he said.

Marketing challenge
Google announced intentions to acquire Motorola Mobility for $12.5 billion in August.

As a result, Microsoft remains the only mobile platform provider without direct ownership of a hardware arm that designs and produces mobile phones.

?In terms of Samsung producing Windows phones, the addition of another top-tier manufacturer certainly helps Microsoft,? Mr. Elkin said.

With Windows Phone 7 and Mango well received by mobile experts, Microsoft?s challenge is in getting consumers to take notice.

?Microsoft?s problem isn?t so much the quality of the experience it is offering as it is the awareness needed to get people to consider Windows Phone and purchase it.? Mr. Elkin said.

?Having another strong handset manufacturer will help with that,? he said.

?What they really need is to get manufactures and carriers to really promote to consumers to drive uptake.?

However, promoting Windows Phone may prove challenging after next week, when Apple is expected to announce its new iPhone.

?With Apple announcing the next iPhone next Tuesday, pretty much everything that happens this week is going to be drowned out by all the noise around that,? Mr. Elkin said.

?That is going to make it hard for other operating systems to get a word in edgewise,? he said.

Samsung and Microsoft have also agreed to cross-license the patent portfolio of both companies, providing broad coverage for each company?s products.

As a result, Microsoft will receive royalties for Samsung's mobile phones and tablets running the Android mobile platform.

Microsoft has signed a handful of similar licensing agreements with Android manufacturers over the past year, reportedly deriving a significant chunk of revenue as a result. However, the strategy could be just as much about trying to put more marketing muscle behind Windows Phone than the actual revenue from the fees.

The other manufactures Microsoft has licensing agreements with include HTC, General Dynamics Itronix, Onkyo, Velocity Micro and Wistron.

?The irony is that in some ways, Microsoft is more successful in this patent issue than it is with its own operating system,? Mr. Elkin said. 

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York