Microsoft and Samsung agreed Wednesday to cross-license the patent portfolios of both companies that would see the Korean technology giant paying royalties to Microsoft for Samsung's smartphones 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 Won-Pyo Hong, executive vice president of global product strategy at Samsung's mobile communication division.
Analysts have expressed concerns that Google's Android OEM partners could consider supporting Microsoft's Windows Phone platform as a hedge against Google pursuing a more integrated software and hardware strategy or simply providing Motorola with most favored nation status. In August, Google agreed to buy Motorola Mobility for $12.5 billion to protect the Android ecosystem.
In our opinion, today's news illustrates Samsung's move to hedge platforms and is significant as we estimate it holds 26% share of Android phones as of CY2Q11, Susquehanna Financial analyst Jeffrey Fidacaro wrote in a note to clients.
Another smartphone vendor HTC, which holds 22 percent Android share, already has a similar agreement in place with Microsoft as it has continued to develop phones on the Windows platform.
Samsung expects to launch Windows Phone 'Mango' this fall. Samsung currently sells only one Windows-based phone in the U.S. of 123 total handset models, Fidacaro said.
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, Won-Pyo Hong said in a statement.