Microsoft Now Making Even More Money From Android

Microsoft just signed a deal with one of the biggest electronics makers in the world to license technologies related to Android and Chrome. The agreement is with Taiwan’s Pegatron, and with it, Microsoft now has patent-licensing deals with four out of the five top Taiwanese manufacturers, the company announced on Wednesday.

It may seem strange that Microsoft is licensing Android and Chrome patents when both of those products are managed by Google. But Microsoft holds many patents that relate directly to technologies used in the Android operating system and Chrome browser, and the company makes hundreds of millions of dollars every year from its licensing agreements with various manufacturers.

Pegatron is one of Taiwan’s major electronics manufacturers, assembling devices sold by many of today’s top tech companies — Apple, HTC, HP and others. It used to a subsidiary of Asus (also known as Asustek) but was spun off in 2010. Last year the company posted more than $20 billion in revenue, according to Businessweek.

The patent deal with Microsoft covers any e-readers, tablets and smartphones that Pegatron builds that run either Android or Chrome. With the agreement, more than 70% of all Android devices used in the U.S. will be made under a license with Microsoft.

Neither Microsoft nor Pegatron is saying what the terms of the deal are exactly, but Microsoft did say it would now receive royalty payments from Pegatron.

Looked at in the context of the icy technology cold war between Microsoft and Google (which has produced ads like this one), the announcement is a chest-thumping move on Microsoft’s part. While Google doesn’t make any money from Android device sales (it uses the platform to sell ads), Microsoft is now making more than ever thanks it its intellectual property.

What do you think of the deal, and that Microsoft makes so much money from Android?