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Microsoft (NSDQ: MSFT) announced another notch in its belt as part the aggressive patent campaign it is running against Google (NSDQ: GOOG) and its partners, signing a licensing deal with contract-manufacturing company Wistron that covers both Android and Chrome. No financial terms were shared but Wistron is, of course, paying for the privilege of not being sued by Microsoft.
The deal is the fourth in about a week that Microsoft has signed with the smaller fish of the Android community, following deals with General Dynamics, Onkyo, and Velocity Micro. Microsoft’s general counsel Brad Smith wasn’t exactly being subtle Monday on his Twitter feed when it comes to the ultimate target of Microsoft’s efforts, quipping “No need to calculate pi to figure that one out,” a reference to Google’s reported bid of $3.14 billion during last week’s Nortel patent auction, ultimately won by a consortium including Microsoft for $4.5 billion.
It’s an old story by now that Microsoft has decided to make IP licensing a big part of its mobile strategy in hopes of convincing phone and tablet makers that Android isn’t free despite the fact that Google makes it available to partners at no charge. This allows Microsoft to argue that even though Windows Phone 7 licensees have to pay for the software, in the end it works out about the same without the corresponding legal headaches involved with choosing Android. Motorola (NYSE: MMI) and Barnes and Noble (NYSE: BKS) have decided to fight Microsoft, while others, such as the above four companies and Android powerhouse HTC, have signed licensing deals that could actually generate more mobile revenue for Microsoft than Windows Phone 7.
But the Wistron deal is interesting for two reasons. The first is because it involves a contract manufacturer: a company that makes hardware for other companies. If Microsoft expands its legal efforts to target that community in addition to those selling devices directly to end users, the potential pie grows substantially larger as almost every modern consumer electronics company uses a manufacturer partner based in China or Taiwan.
The second is because it also involves Chrome in addition to Android. There were rumors last year in the manufacturing community that Microsoft was pressuring companies thinking about making Chrome OS notebooks to sign the same kind of deals as Android licensees, said to be one of the reasons Chrome OS systems were delayed about six months. Now that Wistron has established a beachhead for Microsoft with Chrome OS, expect others to follow Wistron’s lead or gear up to challenge Microsoft’s claims.