Quanta Computer has agreed to pay Microsoft a license for its devices running Google Android or Chrome.
By doing so, it becomes the latest in a string of companies that have submitted to a Microsoft licensing program rather than fight a patent-infringement suit in court. "We are pleased to have reached this agreement with Quanta, and proud of the continued success of our Android licensing program in resolving IP issues surround Android and Chrome devices in the marketplace," Horacio Gutierrez, corporate vice president and deputy general counsel for Microsoft's Intellectual Property Group, wrote in an Oct. 13 statement.
Exact financial terms were undisclosed by either company.
Over the past few months, Microsoft has entered into licensing agreements with companies large and small. Both Samsung and HTC indicated their willingness to pay Microsoft a fee for each Android device sold, with Samsung indicating it would go a step further and also collaborate on the development and marketing for Windows Phone.
The implicit threat is that Microsoft will sue any Android manufacturer who doesn't agree to pay a licensing fee. Motorola Mobility, the one major holdout from such a licensing agreement, is currently locked in a bitter and complex patent-infringement lawsuit with Microsoft; it remains an open question how Motorola's planned acquisition by Google will affect that battle.
Microsoft's legal counsel argues that intellectual property "incentivizes" research and development, advancing the mobile industry. Google has argued just as stridently that Microsoft's Android-related maneuverings constitute a glorified extortion scheme.
Research firm Nielsen estimated Google Android's share of the U.S. smartphone market at 43 percent, leading Apple's iOS (28 percent) and Research In Motion's BlackBerry franchise (18 percent). Meanwhile, it placed Microsoft behind those competitors with 8 percent of the market.
Despite anemic sales for its year-old Windows Phone, Microsoft is determined to seize a greater share of that market. It began rolling out its wide-ranging Windows Phone "Mango" update Sept. 27, on top of signing deals with a number of manufacturers-including Samsung-to produce a new generation of devices preloaded with Mango.
"It was under a year ago that we launched the first Windows Phone," Microsoft CEO Steve Ballmer told an audience of media and executives at this year's financial analyst meeting. "We haven't sold quite as many probably as I would have hoped in the first year."
That being said, Microsoft can perhaps take hope in the revenue stream from Android licenses.