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Android licensees: If you're not paying, you're being sold

The latest litigation lollapalooza over Android reminds one of the old web adage that if you’re not paying for content, you’re the asset being sold.

That’s certainly one of the consequences of the Android licensing model. The mobile phone vendors with no software intellectual property are pawns in a game between IP holders. It’s clear that Microsoft and Apple and Oracle (and perhaps Nokia) have IP issues with Google. But it’s the licensee device vendors which are most often the accused. Whether Google indemnifies or not is an open question, but the evidence is that the vendors are exposed.

The proof is in the fact that HTC is paying Microsoft for the use of Android. It’s conceivable that Microsoft also asked Motorola for Android royalty payments but were rebuffed. It’s also possible that since HTC is still a large scale Windows Mobile licensee, they were given a way out of the Android IP trap by Microsoft. We don’t know if there were confidential deals between LG and Samsung on this issue (as they are both committed to the Windows Phone platform but shipping Android). In either case, Motorola may be forced to do the same and pay (Microsoft) for Android.

It’s understood that Google gains some value from Android but also has hidden costs from it as well. Now the licensees have to recognize their hidden costs of the platform as well. There is the IP tax but also the question of control over one’s destiny. Google is selling the vendors as an asset class to advertisers. Is that a positive consequence for their brands?