Microsoft found guilty of breaching a patent technology used in its Lumia phones. Quarterly earnings reveal a loss of $4 million dollars in its phone business.
According to a report by Reuters, Redmond giant Microsoft has lost a round in a costly patent battle. On Monday, the Windows maker was found guilty of using InterDigital Inc’s technology in its mobile phones without any legal permission to do so. Presiding over the case, Judge Theodore Essex said that Microsoft infringed two wireless cellular patents owned by InterDigital. He also added that it would not be against public interest to levy a ban on Microsoft devices from being imported into the United States. However, the judge’s decision has to be reviewed by the full commission before any import ban is enacted.
Microsoft is not the only one facing InterDigital’s fury, it has also filed patent lawsuits against Huawei, Samsung, and ZTE. An unfavorable ruling against Microsoft could create all the more problems, who is already finding it hard to keep up with the shaky phone business it bought from Nokia in 2014.
This implies that the phone business is not really Microsoft’s cup of tea. In its quarterly earnings report to the US Federal Trade Commission, Microsoft’s smartphone business lost $4 million in the third quarter of the fiscal year 2015. The Redmond-based company said it sold 8.6 million Lumia handsets and 24.7 non-Lumia handsets, implying it lost 12 cents per handset it sold on an average. And with Microsoft’s deal with Nokia ending in 2016, it still has a few years under its belt. With Microsoft undergoing losses already, what lies ahead seems quite troubling to say the least.
Moreover the fact that Microsoft’s latest financial report has warned investors that it may need to take a goodwill impairment on its phone business if things do not get right. Analysts have also predicted that Microsoft’s Nokia branded smartphones, and cheap Lumia phones are selling, though its higher end models are not. Which is why, Microsoft has triggered a warning that its phone business is at an ‘elevated risk of impairment’.