Microsoft says that it has agreed with Asus to license its broad Android patents to the company in return for the pre-installed software. Interestingly, a similar deal appears to have happened with Samsung which settled with Microsoft and subsequently began bundling Office as well.
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It’s been estimated that Microsoft makes more than $2 billion a year from over 300 patents it holds surrounding Android mechanisms, so it’s likely using that leverage to force phone vendors to distribute its apps, instead of suing for cash.