Microsoft Bundles Productivity Apps With Lenovo Devices
Zacks Investment Research | Aug 23, 2016 09:15PM ET
Microsoft Corporation (NASDAQ:MSFT) has added Lenovo to the list of companies with which it has patent cross-licensing deals. The deal will allow Lenovo to use some of Microsoft’s intellectual properties in its own as well as its subsidiary Motorola’s devices. Lenovo acquired Motorola (NYSE:MSI) from Google (NASDAQ:GOOGL) in 2014.
In addition, Lenovo’s Android-based devices will get Microsoft’s Office, OneDrive and Skype preinstalled. However, the financial terms of the deal and the models slated to get the features weren’t disclosed.
A Win-win situation
It seems that with this partnership Microsoft aims to boost its licensing revenues that were down sharply in the most recent quarter. Notably, in the recently reported fourth quarter fiscal 2016 results, the company witnessed a 21% year-over-year decline in its patent licensing revenues mainly due to a fall in licensed units and license revenue per unit. In addition, the company could get access to a large part of the PC and smartphone market that Lenovo covers.
Microsoft inked similar deals with more than 70 Android device makers such as Samsung (KS:005930), LG, Asus and Xiaomi to name a few. Since the launch of its IP licensing program in 2013, Microsoft has signed more than 1200 licensing agreements.
From Lenovo’s point of view, by offering customers Microsoft’s popular apps, it can win back some of the mobile market share that it has lost lately.
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