Microsoft makes more money from Samsung than from Skype, Windows Phone, and Xbox combined

psoham777

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If that was the case, MS would've never bought Nokia, they would've gone for Samsung instead.
Nokia has a WP share of more than 95%, Samsung has it around 2%. So how is your statement justified? From wherever you are getting this information, its totally false.

Firstly Microsoft never discloses its sales figures or profit figures like other companies.
 

Ebaneeezor

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If that was the case, MS would've never bought Nokia, they would've gone for Samsung instead.
Nokia has a WP share of more than 95%, Samsung has it around 2%. So how is your statement justified? From wherever you are getting this information, its totally false.

Firstly Microsoft never discloses its sales figures or profit figures like other companies.

It's the patent portfolio and now Nokia patents. Microsoft makes about 3.10$ for every Droid sold.

Here is just one example.

http://www.howtogeek.com/183766/why-microsoft-makes-5-to-15-from-every-android-device-sold/
 

Bobvfr

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This isn't really a surprise, MS just let Samsung, Android and other just use their already developed software via licensing agreements, no need to spend, just take the profits.

Whereas MS are spending a lot on development on WP, Windows and other stuff, it costs a lot to get into newer markets.

If they get it right the profits come later, if they get it wrong then the future is bleak.

I for one think they are getting it very right, but it will take a couple more years before we see the full results.


Bob
 

WanderingTraveler

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As far as I know, the figure quoted for the Samsung royalties corresponds to revenue.

In other words, it does not include legal and R&D expenditures.
 

winrayjay99

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This what I don't get. Why doesn't Microsoft go after Google directly, or Google defend it's OEM partners by suing Microsoft. I know if this were to happen it would change the Smartphone landscape. I mean Google is still dealing with Oracle over JavaScript.
 

a5cent

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As far as I know, the figure quoted for the Samsung royalties corresponds to revenue.

In other words, it does not include legal and R&D expenditures.

Money from IP licensing is basically pure profit. In 2013 MS had to do absolutely nothing to cash Samsung's check. Same thing this year. It's profits, not revenue.

This what I don't get. Why doesn't Microsoft go after Google directly, or Google defend it's OEM partners by suing Microsoft.

They tried. That was the whole point of buying Motorola, who's patents didn't prove to be as effective as Google expected/hoped. Google can't defend their OEM partners because MS' claims appear to hold up in court and Google doesn't own any patents that they could effectively counter-sue with.

I don't know why MS doesn't go after Google directly, but I suspect it's easier and more worthwhile to go after those companies actually earning money with Android, which Google doesn't.
 

jmshub

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If I recall correctly, the software itself doesn't infringe on Microsoft's patents. It is the actual implementation of the software on phones that causes the infringement, and that is why the handset manufacturers are on the hook, not Google themselves.
 

berty6294

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So basically what is being said is that if WP succeeds, Microsoft wins. If WP fails, Microsoft still wins. lol

It makes a lot of sense. The majority of Microsoft and everything they do and make and sell are behind the scenes, as in not always seen by the general public. Xbox, Surface, Windows Phone, Skype are all such a small part of the company, they can toy with a lot of different ideas and not be afraid of jeopardizing the entire company. If every one of those parts I just mentioned failed, Microsoft would be just as strong if not stronger than before.
 

a5cent

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If I recall correctly, the software itself doesn't infringe on Microsoft's patents. It is the actual implementation of the software on phones that causes the infringement, and that is why the handset manufacturers are on the hook, not Google themselves.

Not sure I understand what you are saying. Any link?

So basically what is being said is that if WP succeeds, Microsoft wins. If WP fails, Microsoft still wins. lol

lol, but seriously, only if you define "not losing" to be the same as winning, which I don't think it is.

I think any company that builds products that are in widespread use also requires a presence in the consumer space, if only to fend against other companies attempting to chip away at their revenue streams from the bottom up. That is exactly what Google is doing (web apps, chrome, etc) and without a consumer presence Google would be even more successful than they already are. MS ran the exact same strategy two decades ago against IBM, very successfully I might add.

A MS without the consumer side would still be a very large company, but a very different company and much more vulnerable to their competition than they are now, in all areas. I think that is closer to losing than winning.
 

dkediger

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Google has very effectively shielded itself from direct action in that they don't really generate very much revenue *directly* from Android.

They get certification - not licensing - fees from OEMs that want to use Google Services (and only for Google Services, not for Android itself) and then of course the real money that is derived on the back end in the data generated when everyone uses those services.

The OEMs are the ones left with their necks out when a feature covered by a patent is then physically implemented on a handset.
 

KhawarNadeem

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They can't go after Google. Google's model is pretty effective at avoiding lawsuits. They're just making open source software, and if that somehow happens to infringe on MS' intellectual property, it's the headache of the OEMs that actually use said software. At least that's the way I understood it from an article I read ages ago.

But this whole thing is great for MS, isn't it? They can use this money for R&D purposes, so it's almost as if WP/Xbox development is funding itself, even if not directly making profits. That's pretty much been the MS strategy. Pushing into a market even if they go into loss for years, using the money they make from other divisions to fund their research, but eventually they 'get it right' in some way and start getting higher marketshare. Like how the PS2 absolutely destroyed the original Xbox in sales, but the PS3 and X360 sold in equal numbers, and now the XBOne isn't doing badly either. MS is still doing what they do best. ;)
 

tgp

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I didn't know that, MS can kill android?

Do you remember this famous quote?

"I will spend my last dying breath if I need to, and I will spend every penny of Apple?s $40 billion in the bank, to right this wrong. I?m going to destroy Android, because it?s a stolen product. I?m willing to go thermonuclear war on this." - Steve Jobs

Sent from whatever device I happen to be using today using Tapatalk
 

salmanahmad

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How that? I doubt it could kill either.

Like I said, *MAYBE*.

I read another article on this issue a day or two ago and it said that two hundred patents "families"(not sure what families stands for) we're required to make a Samsung smartphone.

My initial impression of the article was that Samsung is not new to the world of copying features, maybe they are using elements of Windows/Windows Phone in their TouchWiz UI/UX.

Today I realised that I was wrong. It turns out that 200 patent families we're required to make an Android smartphone, not just Samsung in general.

In theory they could maybe kill Android...but why don't they? Possibly because they could be using an almost equal amount of patents from Android. Or they just want to earn money. :p

This is my theory, I could be wrong. Sorry for not fully explaining myself in the previous post.
 

a5cent

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Today I realised that I was wrong. It turns out that 200 patent families we're required to make an Android smartphone, not just Samsung in general.

In theory they could maybe kill Android...but why don't they? Possibly because they could be using an almost equal amount of patents from Android. Or they just want to earn money. :p

This is my theory, I could be wrong. Sorry for not fully explaining myself in the previous post.


No need to apologize. I can always ask about what I don't understand.

Something you may be interested in:

Not all of those patent families belong to MS. Most actually don't.

Furthermore, most of them are FRAND patents, meaning anyone can use the technology for a very low cost (a few cents per device).

AFAIK MS doesn't have any more mobile IP up their sleeves, so they have, at least as far as Samsung is concerned, gone as far with this as they can go.

I think Samsung's biggest problem would be, if MS isn't asking every OEM for the same fees. That would put Samsung at a disadvantage, particularly against competitors making lowest end low margin devices.
 

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