MOUNTAIN VIEW, Calif.
Mobile devices represent one of Google Inc.'s biggest moneymaking opportunities. That's the main reason Google developed and gives away its Android software for smartphones and computer tablets. The strategy has paid off so far: Android is used on about 190 million devices and is the main reason Google's mobile revenue is now running at an annual rate of $2.5 billion, or about $625 million per quarter.
But Android also has presented Google with some thorny issues because major companies such as Oracle Corp., Apple Inc. and Microsoft Corp. contend the software infringes on their patents. Most of the lawsuits and other legal actions so far have been aimed at the makers of the devices relying on Android.
To protect itself and its partners, Google has reached an agreement to buy cellphone maker Motorola Mobility Inc. and its 17,000 patents for $12.5 billion.
But will that be enough to ensure Google won't have to chip in more money as the makers of devices relying on Android reach licensing agreements with Microsoft and others? Google CEO Larry addressed the issue Thursday during the company's third-quarter earnings conference call.
QUESTION: So we're seeing some of the Android partners now agreeing to pay Microsoft licensing fees. So in order to protect the ecosystem is Google planning on subsidizing a portion of these fees?
ANSWER: Rather than see Microsoft compete in the marketplace with their own smartphones, they have really continued to resorting to legal measures to hassle their own customers, right? So, it seems kind of odd. We haven't seen the details of those total agreements. I suspect that our partners are making good deals for themselves there.
So while there is a lot of press around that, we are really looking forward to announcements (on a new Nexus phone) with Samsung next week, which I think will be very exciting. We see Android growing gangbusters and we don't see anything that is going to stop that.