Samsung forms alliance with MS against Apple

By Kim Yoo-chul

A patent cross-licensing deal signed between Samsung Electronics and Microsoft is expected to strengthen the former’s hand in its legal fight against Apple, sources and industry experts said Thursday.

The two companies agreed to settle their dispute over the use of patented technologies in the Android operating system (OS) used in Samsung smart gadgets, helping the firms make a fresh start and concentrate on fighting Apple.

“Samsung is securing multiple mobile OSs to put it in a better position in its fight against Apple,” a source told The Korea Times.

Samsung currently relies heavily on Google’s Android OS.

It has its own system called Bada, but the internally-developed OS hasn’t taken off.

Samsung also uses Microsoft’s Windows Mobile and it’s been in talks with U.S.-based chip giant Intel to develop a new mobile Linux initiative named Tizen.

“A lot of OSs means better negotiating power. The agreement is a pre-emptive move before the iPhone 5 is released on Oct. 4. Samsung will also significantly boost the sale of its tablets and smartphones thanks to the partnership with MS,” said Koo Ja-woo, an analyst at Kyobo Securities.

Samsung has been involved in an intensive patent fight with Apple since early this year, and plans to sue the American firm for infringing on its wireless patents in the upcoming iPhone 5.

Samsung owns about 28,000 patents in the United States alone, more than the 24,500 granted and pending patent applications held by Motorola worldwide. Globally, Samsung holds more than 100,000 patents, according to company officials.

“Samsung is expected to effectively fight Apple backed by Microsoft, which has a lot of advanced operating programs and device-fit content,” said Park Kang-ho, an analyst from Daishin Securities.

However, a cross-license agreement does not necessarily mean Samsung can use Microsoft patents against Apple.

Samsung officials said it just means that Samsung is allowed to use the inventions protected by Microsoft’s patents to the extent allowed by the agreement.

“As long as Samsung builds devices running Windows Phone, it will benefit from Microsoft’s patents,” the officials said.

Apple has so far filed lawsuits only against Android devices — not against Windows Phone products — produced by Taiwan’s HTC and Samsung.

The Samsung-Microsoft alliance is also the most important Android-related intellectual property (IP) deal in its own right and even more significant against the background of Google’s acquisition of Motorola Mobility.

“If Samsung truly believed that Google’s takeover of Motorola Mobility was going to be helpful to the entire Android eco-system at large, it would have waited until that deal was closed before concluding the license agreement with Microsoft,” said a Samsung official.

“Samsung knows it can’t rely on Google. We’ve decided to address Android IP issues on our own.”

Google came into mobile-computing software in 2009, offering a free operating system to device makers and intending to make money from expanded use of its search engine and Web products.

However, repeated accusations by Microsoft and Apple that Android used their patented technologies have been creating pressure on customers to recognize that the system wasn’t cost-free.

Samsung Electronics understands that Android system has patent problems that should be settled with licensing.

Samsung will pay $180 million in royalties to Microsoft this year, but market analysts have no doubt that the situation is favorable to Samsung.

In a recent meeting with local reporters, chief executive Choi Gee-sung said the company was in a “transitional game” with Apple.