HTC inks patent licensing deal with Microsoft for Android

HTC and Microsoft signed a patent licensing deal covering HTC's Android handsets that calls for the smartphone vendor to pay Microsoft royalties on the phones.

The terms of the deal were not disclosed, nor were the specific patents and intellectual property HTC will be licensing. However, the deal is notable--as Harry McCracken of Technologizer points out--as it leaves the door open for Microsoft to target other Android handset makers such as LG, Motorola (NASDAQ: MOT) and Samsung.

Indeed, according to CNet, which cited unnamed sources, Microsoft believes Google's Android user interface and underlying operating system infringes on its intellectual property. Horacio Gutierrez, Microsoft's deputy general counsel, told CNet that the company prefers to avoid patent lawsuits, but that it has a responsibility to make sure that "competitors do not free ride on our innovations."

"We have also consistently taken a proactive approach to licensing to resolve IP infringement by other companies and have been talking with several device manufacturers to address our concerns relative to the Android mobile platform," he said.

That Microsoft was able to reach an agreement with HTC is not entirely surprising, considering HTC's long collaboration with Microsoft on Windows Mobile; indeed, HTC confirmed that it will have a Windows Phone 7 device out by the end of the year.

Interestingly, the deal between HTC and Microsoft comes amid HTC's separate patent battle with Apple (NASDAQ: AAPL), in which Apple is accusing HTC of infringing on its hardware and software patents for the iPhone. That lawsuit has been seen as an indirect shot at Google.

In other HTC news, the company outlined plans to increase handset shipments in the second quarter by more than 50 percent, up to 4.5 million from 3.3 million in the first quarter. HTC CFO Cheng Hui-ming told the Financial Times that the growth reflects "the growing popularity of the Android platform in Europe and the U.S."

Cheng said HTC, the world's No. 5 smartphone maker, has done well in the smartphone market because "our product refresh cycle is faster than our competitors ... if your plan was made two years before you launch your phone, then the design and pricing probably will not match the changes in the market." He said though the definition of a  top-tier smartphone has changed in the market as smartphones have become more popular. A few years ago, HTC was selling devices for $349 after subsidies in the U.S. market, "but a premium phone is now $199," he said.

For more:
- see this release
- see this Cnet article
- see this Dow Jones Newswires article (sub. req.)
- see this Reuters article
- see this FT article
- see this Technologizer post
- see this Reuters article

Related Articles:
HTC promises to storm back in Q1
HTC vows to fight Apple's patent suits
What the Apple/HTC lawsuit means for the future of mobile
Apple stings HTC with patent lawsuit

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