We all know who Foxconn is. They’re the manufacturing company that actually makes the components and products that go into the consumer electronic products we all know as Apple, Samsung, HTC, LG, and others. They build components, assemble products and supply these other manufacturers. It’s been pretty fascinating to watch all the Microsoft bashing that has been going on lately. Yes, Windows 8 hasn’t seen the massive adoption some had expected, but that battle is hardly over and it has only just begun. More on that in another article, but it’s interesting news that Foxconn has come to a royalty agreement with Microsoft that will pay Microsoft for all the Android devices it produces.

Foxconn is not alone, there are as much as nine other manufacturers that have these arrangements as well. Beneath it all it turns out Microsoft has a number of patents that seem to be quite profitable. By one account, HTC reportedly pays Microsoft $5 for every Android phone they put out. In all, it is believed that Microsoft gains hundreds of millions of dollars on these Android-related patents. The details on what these patents cover are not widespread knowledge, but apparently clues have come forward from a number of lawsuits.

“Examples include patents related to “implementing both long and short file names in the same file system,” a monitoring system that determines when to erase memory from flash memory devices, and patents related to managing contact databases and meeting requests.”

Microsoft has hardly kept this a secret and has let it be known that this is just business.

 “For those who continue to protest that the smartphone patent thicket is too difficult to navigate, it’s past time to wake up. As Microsoft has entered new markets from the enterprise to the Xbox, we’ve put together comprehensive licensing programs that address not only our own needs but the needs of our customers and partners as well. As our recent agreements clearly show, Android handset manufacturers are now doing the same thing. Ultimately, that’s a good path for everyone.”

If you follow the money it’s clear when you look at the fact that Android is released as an open-source operating system that a good deal of money has to go through the manufacturers, thus these ongoing legal agreements. The key here is that Microsoft is diverse in its properties and products. Microsoft – as a player in so many markets is a threat that competitors take notice of. They may not be doing much at this time with their own smartphone platform, but they certainly are converting in the smartphone market to the tune of a nice revenue stream while they continue to try to really break through on their own product.