Teenage dream: Making Money System

Google last year said Android is a $1 billion business. Microsoft, it seems, may have similar plans for Google’s mobile operating system. Thanks to a barrage of patent licensing agreements with Android manufacturers, including a potentially highly lucrative deal in the works with Samsung, Microsoft is on its way to making big money with Android. How much could it all be worth?

Well, with 500,000 daily Android activations that Google recently reported, Microsoft could make $912 million in a year if it extracts $5 per activation on every Android smartphone or tablet sold. That’s how much it reportedly makes on each HTC Android device, as part of a licensing deal struck last year. It’s a long way to getting all Android makers to pony up, but you can see how big an opportunity this is for Microsoft, which is studiously lining up licensing deals with Android manufacturers. There are some 36 Android licensees as of May, making some 310 devices.

The latest and potentially biggest deal is reportedly in the works with Samsung, the world’s leading Android manufacturer in terms of sales. Microsoft is leaning on Samsung to sign a patent licensing deal that could pay Microsoft $15 for every Android device, although Samsung is reportedly trying to bring that down to $10. At that price, Microsoft could make an estimated $200 million alone just on Samsung Galaxy S II smartphones this year based on projections of 20 million sales. And if Android activations pick up speed, which is likely considering the pace of Android’s growth, it could mean an even larger opportunity of more than $1 billion annually for Microsoft.

Again, it’s no guarantee that Microsoft can strike licensing deals with every Android manufacturer but the Windows giant has been on a roll lately. It has recently signed deals with General Dynamics Itronix, Wistron Corp., Velocity Micro and Okyo Corp. Microsoft has not disclosed how much those deals are worth, though it said it was collecting royalty payments from the licensees. Many firms choosing to strike deals, including companies like Itronix, which presumably has some General Dynamics patents to cross license, suggests Microsoft has a pretty compelling argument that may work on other manufacturers.

Microsoft hasn’t won over everyone, however. Motorola has been a hold-out, as has Barnes & Noble. Both are fighting Microsoft in court over patent infringement claims. A win by either could help slow down Microsoft’s patent rampage on Android. But it could be some time before those cases are decided. In the meantime, if Microsoft can add Samsung to the list of licensees of patents allegedly infringed upon by use of the Android operating system, it could be a signal to other manufacturers that it might make sense to fall in line.

There’s something a little perverse about imagining Microsoft making so much from another operating system when it can’t seem to get much traction for its own mobile efforts. Gartner estimated Microsoft sold just 1.6 million Windows Phone 7 devices in the first quarter. It’s almost certain then that Microsoft made a lot more money from its deal with HTC, which sold 9.3 million phones in the first quarter, most of them Androids.

But it’s a sad fact of life in the fast-moving world of technology. Companies that aren’t necessarily competitive can still rake in dollars with their intellectual property. Nortel just sold its patents to a consortium including Microsoft, RIM and Apple for $4.5 billion, leaving Google without some significant patent protection. Google has decried the state of software patents but bid unsuccessfully on the Nortel portfolio to bulk up its defenses. But with Microsoft coming after its Android partners, Google doesn’t have much to say it seems. It may be that Microsoft’s patent licenses become just a cost of doing business for Android OEMs. I don’t think it will derail Android’s overall momentum, but it does undermine the promise of the platform as a free operating system. And it could lead to less innovation and added costs eventually passed on to consumers.

At any rate, Android is still a world beater for now though increasingly a huge lawsuit magnet. Google is still making its $1 billion from advertising on Android. Manufacturers like HTC are seeing record profits by feeding off of Android’s success. It seems like Microsoft is making sure that even if its own platform is starting slowly, it’s getting a sizable piece of the Android action.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

Mobile Q4: All Eyes Were on Android, 4G and the Rising Tablet Tide
A Media Tablet Forecast, 2011 – 2015
A Global Mobile Handset Platform Forecast, 2011 – 2015

Carlos Pena looks like he's 30 again. He's only 33, but still.

Pena’s two run homer Wednesday night gave him a team leading 18 for the season. Thirty five HR and 90 RBI are a realistic possibility for the first-year Cub. Stats you would expect out of a player making $10 million.

It only makes sense for the Cubs to trade Pena before this season’s trade deadline. The team is going nowhere this year, and Pena’s hot hitting isn’t nearly enough to settle one’s stomach when watching whatever social security-eligible starting pitcher the Cubs choose to hand the ball to.

Pena certainly will draw interest from offensively challenged teams. Pena’s power and ability to drive in runs are certainly attractive, and although his .225 batting average is ugly, he still sports a respectable .343 OBP. The left-hander’s playoff statistics are even better. In 19 career playoff games he's hit .269 with 4 HR and 14 RBI. Pena also comes with no baggage and is widely considered throughout baseball to be a great teammate.

Perhaps the Giants would be interested, and could creatively move Aubrey Huff to another spot on the diamond as they have in the past. A typical deadline trading partner of the Cubs, the Pirates would potentially be interested in buying hitting, barring a collapse before the deadline. Pittsburgh has certainly helped the Cubs out with trades in recent years, and Chicago could return the favor by giving them an upgrade over Lyle Overbay.

Pena’s defense is so good that if he were traded to an American League team, it could be to play first base, and a team’s current first baseman could move to DH. Odds are that if Pena is traded, it would be in the National League, but the option of going back to the AL remains a possibility.

Teenage dream

Monday, August 1, 2011

Making Money System

More bad poll <b>news</b> for Obama as debt deal brings smiles to Capitol <b>...</b>

Morning <b>News</b> | Slog

Linux gets a bit of good <b>news</b> on the Netflix front | TechRepublic

No comments:

Post a Comment