Microsoft sees revenue potential in smartphone-related patents

Microsoft's top lawyer, Brad Smith, said the company's road to success in mobile isn't based solely on its Windows Phone 7 operating system. According to AllThingsD, Smith said the company also believes it can make money from its vast pool of smartphone-related patents. However, he conceded that the money Microsoft could make per phone from patents isn't as much as it could get via sales of phones running Microsoft software.

Nevertheless, Smith said Microsoft's patent revenue could eventually overshadow the money Microsoft has made to date by licensing Windows Mobile and Windows Phone 7 to manufacturers. Smith estimated that Microsoft and Apple (NASDAQ:AAPL) hold the lion's share of intellectual property for smartphones. He added that Microsoft is interested in licensing its patents, and has already started doing so through its agreement with HTC. In April, HTC and Microsoft signed a patent-licensing deal in which HTC will pay Microsoft royalties on its Android-based phones.

No surprisingly, Microsoft appears unafraid to fight for its patent claims. The firm filed a lawsuit against Motorola (NYSE:MOT) last month, alleging Motorola's smartphones running Google's Android platform violate Microsoft patents. 

Smith insisted though that Microsoft prefers to sell software rather than patent licenses. And Microsoft has lots of room to grow should its Windows Phone 7 software be a success. In its most recent report, digital measurement firm comScore found that of the 58.7 million people in the U.S. who owned smartphones during the three months ending in September, only around 10 percent used Microsoft software. The leading platform, Research In Motion's (NASDAQ:RIMM) BlackBerry, accounted for 37.3 percent of the U.S. smartphone share.

For more:
- see this AllThingsD article

Related Articles:
comScore Reports September 2010 U.S. Mobile Subscriber Market Share
HTC inks patent licensing deal with Microsoft for Android
Microsoft stings Motorola with suit over Android phones

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