Samsung signs pact with Intel, Microsoft

Reuters

Samsung Electronics (Seoul, South Korea) unveiled on Wednesday software pacts with Intel (Santa, Clara, Calif., U.S.A.) and Microsoft (Redmond, Wash., U.S.A.) as the world's second largest cellphone maker strengthens its mobile software push.

Samsung has quickly become one of the largest smartphone makers globally, helped by its strong offering of devices using Google's Android platform.  Analysts said Wednesday's deals signaled Samsung's aim to lower its exposure to Android following Google's $12.5 billion August acquisition of Motorola Mobility.

"The Google Motorola deal certainly gives Samsung some motivation to lessen the dependence on Android," said Matthew Thornton, analyst at Avian Securities.

Microsoft and Samsung signed a deal on Wednesday for development and marketing of Windows phones, while also agreeing on a wide patent cross-licensing deal. Samsung has used Microsoft’s software in the past.

Earlier on Wednesday two Linux software groups, one backed by Samsung, another by Intel, said they have joined forces to develop a new operating system for cellphones and other devices.

Under the deal, the LiMo Foundation and Linux Foundation, organizations aiming to establish a globally competitive Linux-based mobile operating system, are effectively merging their LiMo and Meego mobile operating systems and hope to gain wider industry and consumer support, but analysts said the new Tizen platform is likely to struggle.

It would have to attract wide support from developers and manufacturers to compete with the dozen or so other mobile operating systems available in a smartphone market currently dominated by Apple’s in-house software and Google's Linux-based Android.

"The best hope for them is that big operators get worried by Android... and decide to consciously switch their allegiances to rival platforms to restrict Google's huge influence over the mobile market," said analyst Neil Mawston from Strategy Analytics.

Earlier this year Nokia, the biggest phone maker by volume, ditched its own Symbian operating system in favor of Microsoft’s Windows Phone software.

Currently Windows Phone has a smartphone market share of 2-3%, according to industry analysts, and LiMo and Meego have less than 1% apiece, while Android’s share is almost 50% and still growing.

"This (Tizen) is driven by necessity. Linux rivals to Android have failed to gain traction and Samsung needs to reduce its dependence on Google," said Geoff Blaber, an analyst at London-based telecoms industry consultancy CCS Insight.

The world's second-biggest cellphone maker behind Nokia, Samsung is the leading user of the Androids platform, which has been one of the reasons for its escalating court-room fight over patents with Apple.  Microsoft said the definitive agreement with Samsung to cross-license the patent portfolios of both companies, provides broad coverage for each company's products, and it will get royalties for Samsung's devices running the Android platform.

"It's probably a win-win. Microsoft is leveraging its patents to get customers while Samsung is looking for ways to lessen its dependence on Android," said Avian's Matthew Thornton.

 (Additional reporting by Sinead Carew in New York and Miyoung Kim in Seoul; Editing by Greg Mahlich and Jon Loades-Carter)

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