Microsoft signed a potentially pivotal patent licensing deal this week with Chinese manufacturing giant Hon Hai, parent company to Foxconn. Although the terms of the agreement will remain confidential, the move should help Microsoft bolster its already impressive royalty revenues as it looks to find its footing in the mobile marketplace.
According to TechCrunch, Hon Hai and its subsidiaries manufacture 40 percent of all mobile phones shipped globally. Most notably, Foxconn is a primary original design manufacturer for iPhones and iPads. The new Microsoft agreement is centered on the Android and Chrome devices manufactured by Foxconn, however, for which the American firm will be awarded flat royalty fees.
"We are pleased that the list of companies benefiting from Microsoft's Android licensing program now includes the world's largest contract manufacturer, Hon Hai," Microsoft deputy general counsel Horacio Gutierrez explained. "By licensing both brand name companies and their contract manufacturers, we have successfully increased the overall effectiveness and global reach of the program."
In 2011, Microsoft was already generating more revenue from patent licensing agreements with smartphone makers than from its own Windows Phone platform. According to TechCrunch, experts suspect that the patents associated with this latest deal could trace all the way back to components of Microsoft's MS-DOS and Windows operating systems and user interfaces.