All the trouble with Microsoft (NASDAQ:MSFT) that original equipment manufacturers — OEMs — have been getting mixed up in might be nearing an end, as Microsoft has struck a deal elsewhere in the supply chain that could make things flow more smoothly.
Microsoft had been putting a lot of pressure on manufacturers that were making devices running Google’s (NASDAQ:GOOG) Android operating system and using Microsoft-patented technology. Microsoft even managed to get Samsung (SSNLF.PK), LG (LGEAF.PK), HTC (HTCKF.PK), and Acer (ACEIF.PK) to settle on patent and licensing issues, though Google and Microsoft are still at odds.
Now, rather than focusing its attention on the OEMs, Microsoft has shifted gears and made deals with global contract makers. Hon Hai Precision Industry Co, perhaps better known as Foxconn (FXCNF.PK), was involved in the most recent deal with Microsoft, and the impacts of the deal could be far reaching…
According to Microsoft Taiwan Corp’s chief legal officer, Vincent Shih, “Foxconn’s clients don’t need to worry about infringing Microsoft’s patents anymore, because Foxconn has signed the agreement for them.” Foxconn is not alone in agreeing to a deal with Microsoft; many others, including Pegatron Corp and Quanta Computer Inc, have signed such deals. Shih said that some 50 percent of global contract makers have made similar agreements.
This may prove to be a method for ending to the interminable legal battles between tech companies occuring all over the world — such as those between Apple (NASDAQ:AAPL) and Samsung. However, Microsoft is coming from a very different position than a lot of other companies in the smartphone war. Microsoft came in weak and stands near the bottom of the pack in the smartphone market. The ability to collect licensing fees might prove a greater priority for Microsoft than for other companies that want to prioritize their own sales and see injunctions set against the competition.