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July 25, 2011

Google may not have to pay that much in historical damages to Oracle but the licensing fees will add up for Android

Unwired - In a few years, every Android device maker may have to pay an average $10 licensee fee to Apple, Microsoft, Nokia, RIM, HP and Oracle. That’s $60 per device only for the rights to put Android OS on it.

The actual situation is more complicated based on whether someone could pay one of the companies that already has enough cross-patent agreements. A manufacturer might be able to get enough coverage by paying one or two of the big patent holders once or twice.

Google approach seems to be push forward on their own IP (get more patents) and scoop up other patents when it’s cost-effective.)



Since Android exploded, Google already had 2 big opportunities to remedy it’s patent problem. It could have bought Palm last year for something like $1.5 billion. Which would have got them patent portfolio of the smartphone industry pioneer, IP cross-licensing deals with most of the old players, in addition to all WebOS assets and team.

Last week, they could have had 6000 patent strong Nortel portfolio for something upwards of 4.5B. Which sounds pricey, but would have netted to about $25 per Android device for 1 year of production at current 500K a day rate. Accounting for future growth, spreading it over a few more years, this cost per device would have become negligible, easily covered by advertising and other revenue streams Google can generate via Android. But Google let both of these tremendous opportunities slip through it’s fingers.

Free and Open Source Software (FOSS) discusses Google's patent situation and how they are unable to get good cross-licensing terms.


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