Microsoft Adds a Notch to Its Gun Belt With Quanta Licensing Deal

Quanta Computer has agreed to pay Microsoft a license fee for devices that run Google Android or Chrome. It is the latest deal in a series that Microsoft has inked with manufacturers using Android, and more lately, Chrome, in their products.

Other notable wins for Microsoft have been Samsung and HTC. In September, it reached a licensing agreement with Acer over Android, and with ViewSonic over Chrome. In July, it got Wistron to ink a licensing agreement for Chrome.

Microsoft has scored a real coup with Quanta though: This is the company that is manufacturing Amazon’s Kindle Fire, which is expected to be a wildly popular device, and RIM’s PlayBook, which, well, is not — but still has a niche role to play in the tablet market.

None of the principals responded to LinuxInsider’s queries by press time.

Delighted Shareholders

Microsoft’s shareholders should be delighted with this latest deal, Michael Cherry, an analyst with Directions on Microsoft, told LinuxInsider.

“There have been a number of these agreements signed over the last couple of months, and they are representing a significant revenue stream for Microsoft now,” he said.

This licensing tactic is one Microsoft decided to pursue in earnest a few years ago, Cherry noted, but it has only become a concern to Google lately, as so many OEMs seem to be capitulating.

However, Microsoft is completely within its rights to pursue these agreements, in his view. “Microsoft has a responsibility to their shareholders to protect and monetize its intellectual properties and that is what it is doing.”

Given the number of patent lawsuits in the mobile space, Cherry said, a licensing strategy is the most economically sane for all parties involved.

Whither Google?

Unless, of course, one is Google. The company has been relying on the open source bona fides of Android to drive adoption — a strategy that has largely worked.

Its next stage is likely to be a more aggressive one, based around the acquisition of Motorola Mobility’s patents.

That deal has yet to be finalized — both shareholders and regulators need to greenlight it.

Given the number of wins Microsoft has achieved with its licensing strategy, it is fair to wonder if Google might be overly optimistic.

None of its other options for protecting Android are palatable, though. Google could close Android or create a proprietary fork, for instance, but it has to keep Android the favorite choice for OEMs by continuous improvement of its features.

It’s doing just that, Azita Arvani of the Arvani Group told LinuxInsider, but diverting resources into a proprietary fork is likely secondary to that larger goal.

For the most part, Google has made the best choice it could from an increasingly uncomfortable position, Timothy Q. Delaney, a partner with Brinks Hofer Gilson & Lione, told LinuxInsider.

“Google plainly intends to defend Android against Microsoft and Apple, and the Motorola patents will be useful ammunition,” he said. “It means something that Motorola hasn’t signed a licensing deal with Microsoft. They feel confident they are able to fend off attacks. So I do think the Motorola patents are Google’s end game.”

Peace for OEMs

In the meantime, he continued, OEMs need peace, so they are signing the deals with Microsoft.

Probably they are hoping that Google can cut a deal with Microsoft so Android becomes royalty free, he speculated. “Or that Google will be able to fully defend Android with Motorola.”

Until Google is ready to do that, though, “these companies want to sell products,” Delaney observed, “and they don’t want the risk of Microsoft shutting them down.”

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