Another Android manufacturer caves to Microsoft patent pressure

In the second announcement this week, Microsoft says it has reached an agreement with Velocity Micro for royalty payments

Microsoft's Android legal steamroller snagged two small players this week.

As Ted Samson reported yesterday in Tech Watch, small-time Android hardware manufacturer General Dynamics Itronix agreed on Tuesday to start paying a license fee to Microsoft for each Android device it sells. As best I can tell, the only Android device Itronix makes is a "Rugged Wearable Mobile Computing Platform" called the GD300 "for warfighters, first responders or commercial field service users" with a "glove-friendly touchscreen display."

The very next day, Microsoft announced another capitulation in the Android patent wars. Velocity Micro, manufacturer of the Cruz R101 and T301 Tablets, announced that it, too, would pay Microsoft an undisclosed sum for each Android device it sells. The R101 retails for about $120 and the T301 for about $160, so the royalty payments must be rather minuscule.

As reported earlier this month, Microsoft convinced HTC to start paying royalty fees last year, an estimated $5 for every Android unit HTC sells. That's turned into a substantial amount of money -- likely more than Windows Phone sales. It's hard to believe that Microsoft has sent its expensive legal beagles to chase the small-potato likes of the GD300 and T301, expecting a good return on its efforts.

What we're seeing here is a full-court attempt to start a stampede. Microsoft wants the headlines -- to scare as many tiny Android hardware manufacturers into submission as it possibly can -- and use that momentum to try to sign up the big boys. Last October, DigiTimes singled out Acer and Asustek as being objects of Microsoft's Android strong-arming. That makes sense, because neither is an Android powerhouse. Microsoft's still nipping at Android's heels, not yet taking on the big players.

Right now the big Android manufacturers are HTC, which is already in the Microsoft licensing bag, LG, Motorola (which Microsoft has sued, but not for Android patent infringement), and Samsung. They're all suing and countersuing and cross-suing each other for a multitude of patent offenses, real and imagined, but Microsoft hasn't yet entered the big-boy fray with Android litigation. It'll be interesting to see if Microsoft's Android approach of plucking off low-hanging fruit will pay off.

With Android running way ahead of Apple in mobile phone sales, RIM dying on the vine, and Windows Phone floundering, there's a lot at stake.

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