Microsoft sues Samsung over Android royalty payments

Mobile

Microsoft sues Samsung over Android royalty payments

Cliff Saran

While its CEO is pushing the heterogeneity agenda, Microsoft is on the attack, taking legal action against rival phone maker Samsung.

The software company is suing the world's largest smartphone  maker over breach of contract stemming from an IP sharing agreement in 2011, in which Samsung agreed to pay Microsoft royalties on Android phone sales.

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At the time, Samsung agreed to support Microsoft Windows Phone OS.

But in a blog posted on Microsoft's website, Microsoft corporate vice-president David Howard wrote: "After becoming the leading player in the worldwide smartphone market, Samsung decided late last year to stop complying with its agreement with Microsoft. In September 2013, after Microsoft announced it was acquiring the Nokia Devices and Services business, Samsung began using the acquisition as an excuse to breach its contract."

But Microsoft may have to wait in line behind Apple, which has a longstanding dispute with Samsung over intellectual property. Apple is seeking damages of $2.2bn after accusing Samsung of infringing five patents, including the "slide to unlock" feature of iPhones. Apple is also calling for a ban on sales of several Samsung phones.

As the smartphone market heads towards saturation point, manufacturers are beginning to see the enterprise as the next growth market. Apple made its intentions clear last month by signing a mega deal for IBM to resell and deploy enterprise-ready iPhone and iPads. 

Microsoft CEO Satya Nadella is also targeting the company's mobile device strategy at the enterprise. Samsung Galaxy devices offer Knox, hardware- and software-based security that meets the Common Criteria Recognition Arrangement required for deployments in government.

In Samsung's financial results for the second quarter of 2014, the company's mobile division recorded an operating profit of $4.31bn, down 30% from the previous year and down 31% on the previous quarter.


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