We weren’t sure what Microsoft offered Samsung to convince them to pre-install their apps on Samsung’s latest phones and tablets, but new information reported by DigiTimes suggest a very valuable deal could have been made.
According to them, Microsoft has started offering OEMs discounts on smartphone licensing fees in exchange for getting Microsoft apps preloaded on their devices. If you’re not aware, Microsoft commands a great deal of essential mobile-related patents and force many Android manufacturers to pay for the privilege of using them.
They make a lot of money doing this, with estimates being anywhere between $7 to $15 per device. When you consider the hundreds of millions of Android devices sold by the top manufacturers, that’s a lot of dough (so much so that they actually make more money on Android’s success than they do their own mobile platform).
Lowering the price tag for companies who agree to install Microsoft apps is a very smart move. While it helps, Microsoft doesn’t really need the extra bit of revenue that they get from these deals.
In their quest to transition to a software and services company it’s increasingly important for customers to be exposed to these apps. It helps Microsoft capture mind share in the absence of market share. Some would say that is far more valuable than a few extra dollars being made for every Android device being sold, and they wouldn’t be wrong.
Whether this is the deal Samsung, Dell and the 9 other Android OEMs agreed to in order to accept Microsoft’s apps on their devices remains to be known, but we’re finding it hard to think of any other reason to get in bed with a company they don’t otherwise need to get in bed with to be successful.