I recently discussed how Microsoft is charging Android phone manufacturers a $5-$15 fee per smartphone to license Microsoft patents. Now Oracle has its hand out and is asking for a whopping $15-$20 per Android smartphone for royalties on its patents. So far none of the major phone manufacturers have coughed up any money to Oracle, but it’s only a matter of time before the Oracle lawyers get involved, and the money starts flowing.
The irony here is the only major mobile player that isn’t making money off smartphone licensing is Google, maker of Android, the most popular mobile operating system in the world. One of the main reasons Android is so popular is because of its open-source status. This means that smartphone manufacturers can use Android for free and modify it to their needs. But as we’re seeing with Microsoft and Oracle fees, Android is not free at all.
Will these cumulative licensing fees start to drag down the appeal of Android? Eventually smartphone manufacturers will need to pass these licensing costs on to the consumers. Another reason that Android phones are more popular than the iPhone is because they are much cheaper for consumers, but that could change as well. And finally, how long can Google sustain itself solely on advertising revenue and continue to give away all of its Android and cloud software for free?
Article published on October 24, 2011
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