Samsung’s Galaxy business might be a yearly $1 billion bonanza for Microsoft

Just as previous reports suggested, Android might be a golden goose for Microsoft, a company that has licensing deals in place with many top Android device makers. Previous estimates revealed that Android devices sales might bring Microsoft $2 billion a year, although the number was never confirmed. However, documents from a recent Microsoft vs Samsung case found by Re/code have revealed that the Galaxy device maker might be on the hook for $1 billion in licensing fees owed to Microsoft per year.

Microsoft has sued Samsung in August, after the latter allegedly failed to go through with licensing fees last year. The two companies entered a seven-year cross-licensing agreement in 2011, and in August 2013, Samsung calculated that it owed Microsoft over $1 billion in fees for that year.

However, the South Korean company did not go through with the payment, due in October 2013, until in late November. Thus, Microsoft alleges Samsung owes it an additional of $7 million in interest fees for the late payment.

Samsung was apparently annoyed to see Microsoft’s Nokia acquisition announcement in September last year, and claims that Nokia’s devices aren’t covered by the cross-licensing agreement, and that they’re violating Samsung’s payments, at least according to Microsoft.

Furthermore, Samsung apparently asked Korean regulators to change the royalty terms in its contract with Microsoft.

Since Samsung is the most important Android device maker so far, even if its sales might currently be lower than expected, the licensing fees owed to Microsoft might further increase in coming years.

Samsung has also lost to patent trials against Apple in the U.S., having to pay the iPhone maker over $1 billion in damages. The company did not ink a licensing agreement with Apple yet.

Microsoft’s lawsuit against Samsung follows below.

VIA:

ARS TECHNICA

SOURCE:

RE/CODE