In Even though Microsoft claims that it evaluates each phone and tablet individually, the companys General Counsel Brad Smith is of the opinion that every hardware maker that ships an Android device has a patent issue that needs to be addressed. In a recent interview, Smith said, So far we have not seen a single Android device that does not infringe on our patents.
The important thing is that Smith made this statement after the launch of Kindle Fire. It is quite possible that Microsoft might be eyeing royalty payments from Amazon. This could drive up the cost per device for Amazon. In February last year, Microsoft and Amazon had signed a licensing agreement that covers technology used in the Kindle and various other products. However, that agreement does not cover Amazons new Android-powered Kindle Fire tablet.
All this seems to be creating grounds for Amazon coughing up hefty licensing fees to Microsoft in the near future. Microsoft has recently signed a cross-licensing agreement with Samsung and has similar deals in place with HTC, ViewSonic and other Android device vendors. A recent Goldman Sachs report says that Microsoft will take home an estimated $444 million in 2012 from Android royalties.
As of now Microsoft has refrained from commenting on the further action it may or may not take against the Kindle Fire. But considering the companys aggressive stance on patents, it is being felt that Microsoft may already be eyeing a new licensing agreement with Amazon. The new agreement could be similar to the deals that the company has struck with HTC and Samsung. Microsoft has every reason to go after Kindle Fire. This is because the low price of Kindle Fire has disrupted Microsofts own tablet plans.
Microsofts tablets are expected to be priced higher than the Kindle Fire and even the iPad, thanks to the more expensive hardware and Microsofts Windows 8 license fee of around $50 for tablets. Besides, Windows 8 will be launched around the end of 2012 giving Amazon more than a year to capture the low end of the market. It has also been reported that Amazon might be planning a second Android tablet that will be targeting the premium segment of the market, where iPad currently rules.
The bottom line is that it is in Microsoft's interest to do all it can to drive up the cost of Kindle Fire. The only way the company can do it is by squeezing Amazon on patent related issues.
Add new comment