Microsoft Poised for $32, Huawei Next for Android Patent Licensing Bonanza
After Samsung, Quanta, HTC and scores of other Android device manufacturers, Microsoft (NASDAQ:MSFT) has reportedly set its sights on Huawei for a patent licensing agreement covering its products running Google‘s (NASDAQ:GOOG) Android. [1] Huawei is one of the largest telecom equipment manufacturer, and recently announced a couple of new Android smartphones and a new Android tablet. It is planning to launch multiple new Android devices in the market soon, aiming to become one of the top five smartphone makers worldwide.
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Google’s Android recently overtook Apple‘s (NASDAQ:AAPL) iOS in terms of U.S. smartphone market share, with close to 550k devices being activated every day. Microsoft now has licensing deals with every major Android manufacturer, covering around 55% of all Android devices. In a recent interview, Google’s ex-CEO, Eric Schmidt criticized Microsoft’s patent litigation against Android device manufacturers, stating that Microsoft was using “using tactics to scare people because they are scared of the success of Android”. ((Eric Schmidt: Microsoft Pushes Patent Deals Out Of Fear Of Android, Techcrunch))
We expect Android patent licensing to generate more than a billion dollars in revenue for Microsoft in 2012, but it will have only a marginal impact on Microsoft’s Trefis price estimate, which stands at around $32, nearly 20% above its current market price.
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