Joining forces against mutual rivals, software giant Microsoft and Korean hardware giant Samsung Electronics announced an agreement Wednesday to cross-license patent portfolios, enabling them to profit from each other's products.
The deal allows Microsoft to cash in on Samsung phones and tablets that run Google's Android operating system but contain Microsoft technology, and both companies to better cooperate on the development of Windows Phones.
Solid Partnership
Microsoft has struggled to get a foothold in the soaring smartphone market, lagging behind Apple's iPhone and Android-based phones. In the second quarter, Microsoft's share of the U.S. market fell 1.7 percent from the same quarter in 2010 to 5.8 percent, while Android captured 40.1 percent of the market, up 5.4 percent, and Apple's share climbed 1.1 percent to 26.6 percent, according to comScore's research.
The company is betting big on its alliance with Nokia to install Windows Phone 7 on its new phones to get a better foothold, and the first major update, Windows Phone 7.5, or Mango, became available Tuesday.
Samsung, which already makes Windows Phones, was the top overall manufacturer of smartphones in the second quarter, with its share rising 0.8 percent to 25.3 percent during the quarter, according to comScore.
Earlier this week Samsung debuted the Omnia W, with a 3.7-inch touchscreen and 1.4-gigahertz processor, as the company's first device to run Mango. It will launch in overseas markets next month, with no U.S. release date set. Samsung's Windows-based Focus and Omnia 7 rolled out last fall, and the Focus Flash and Focus S are also due in October.
"Microsoft and Samsung see the opportunity for dramatic growth in Windows Phone and we're investing to make that a reality," said Andrew Lees, president of Microsoft's Windows Phone Division. "Microsoft believes in a model where all our partners can grow and profit based on our platform."
The executive vice president of global product strategy at Samsung's mobile communication division, Dr. Won-Pyo Hong, added: "Through the cross-licensing of our respective patent portfolios, Samsung and Microsoft can continue to bring the latest innovations to the mobile industry. We are pleased to build upon our long history of working together to open a new chapter of collaboration, beginning with our Windows Phone 'Mango' launch this fall."
Legal Inoculation
In addition to spurring cooperation, the deal avoids the expensive litigation that has embroiled Samsung and Apple, with Apple accusing its rival of copying the look and feel of its devices.
"Samsung has been aggressive in taking on an increasingly litigious Apple and a cross-licensing deal could help inoculate Microsoft against future intellectual property violations suits," said Charles King, principal analyst at Pund-IT. "But Samsung is also a major player in one of the world's largest and most sophisticated IT markets -- -South Korea -- and has a large footprint in other Asian markets. So buddying up with the company could provide future dividends for Microsoft, as well. "
Source: http://us.rd.yahoo.com/dailynews/rss/software/*http%3A//news.yahoo.com/s/nf/20110928/tc_nf/80376
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