Samsung will pay Microsoft US$4-5 for each Android based smartphone it sells

Microsoft today signed a broad patent agreement with Samsung to cross-license the patent portfolios of both companies. The agreement covers Samsung’s use of the Android mobile platform, and also gives both companies greater patent coverage related to each other’s technologies. Under the deal, Samsung will pay Microsoft US$4-5 for each Android mobile phones and tablets under the terms of the agreement announced today. Assuming Samsung sells 60 million smartphones a year; Microsoft will get $240-300 million.

Samsung and Microsoft had been in negotiations since July, when Microsoft demanded royalties saying Google’s Android operating system used in Samsung smartphones infringes on its patents. Google has provided Android as a free download for worldwide mobile phone makers, leaving it to the manufacturers to deal with any patent disputes. HTC agreed in April last year to pay Microsoft $5 in royalties for each smartphone, reportedly paying $150 million last year alone.