A week after striking a similar deal with Foxconn, Microsoft has entered into a patent agreement with ZTE covering all Android and Chrome devices manufactured by the Chinese firm.
A week ago, Microsoft entered into a patent deal with Hon Hai, Foxconn's parent company. Now, it's entering into a similar agreement with ZTE. Though the specific details of the deal have not been disclosed, it is similar in nature to the Hon Hai deal, reveals a Microsoft spokesperson. In other words, the deal most likely involves ZTE paying Microsoft a flat fee for each Chrome and Android device the Chinese manufacturer produces. The new deal with Microsoft grants ZTE access to Microsoft's patents, including those for operating systems, browsing and data synchronization.
The Windows-powered ZTE Tania
ZTE is one of the top five manufacturers of Android smartphones in the world and in the last quarter of 2012, it shipped 9.5 million units according to IDC. ZTE manufactures 40% of the world's phones, meaning a lot of new revenue for Microsoft. In fact, the software giant estimates they will be making more revenue from their patent royalties, than they will from selling their own devices. The two companies apparently took two years to work out the deal. “Experience has taught us that respect for intellectual property rights is a two-way street and we have always been prepared to respect the rights of others just as we seek respect for our rights,” says Microsoft's general counsel Horacio Gutierrez.
Apart from ZTE and Foxconn, Microsoft has also struck patent deals with Quanta and Pegatron, and in the future, they may be hoping that both Huawei and Google will follow. However, it is unlikely an agreement will be reached with Google any time soon, as the company has previously referred to Microsoft's cross licensing agreements as ”extortion”.