Business

Microsoft 'showers gold' on anti-Google Cyanogen and its Android alternative

Redmond part of $70m funding round, say sources

Cyanogen

Microsoft will invest in alternative Android firmware startup Cyanogen, a report claims.

Citing anonymous sources, the Wall Street Journal reported on Thursday that Microsoft is slated to become a minority investor in an approximately $70m funding round that will see Cyanogen valued "in the high hundreds of millions."

The Cyanogen project, which for several years has developed custom firmwares for smartphones based on the Android open source project, spawned a company to commercialize its efforts in 2013. At the time, it was valued at $7m.

The firm's stated goal is to develop a version of Android that's independent of Google's control, at a time when the Chocolate Factory is putting increased pressure on smartphone vendors to ship their devices with an OS that's more uniform and includes fewer customizations.

"We're attempting to take Android away from Google," Cyanogen CEO Kirt McMaster bluntly explained at a recent event in San Francisco.

While that goal is probably unrealistic, the idea of a gadfly in the Android market no doubt appeals to Microsoft, which has long struggled to carve a niche in the smartphone market that has been dominated by Android and Apple's iOS.

Redmond has done its level best to make life hard for Android OEMs, particularly by pressuring them to license the hundreds of patents that it claims to hold covering various aspects of Android devices.

By some accounts, Microsoft earns more revenues from these patent licensing arrangements than it ever has from selling Windows Phone devices. What few smartphone makers that have licensed Windows Phone have reportedly been unimpressed by lackluster sales.

If the WSJ's sources are correct, this wouldn't be the first time Microsoft was spotted in talks with Cyanogen. In September, The Information reported that CEO Satya Nadella had sat down with Cyanogen's founders to talk about a possible partnership – or even, potentially, acquiring the startup.

Cyanogen has around 80 employees but claims its open source code is maintained by some 9,000 volunteer developers.

So far, only two companies have inked deals to ship devices running Cyanogen's OS, including China's OnePlus and India's Micromax. And those deals may already be on the rocks, with Micromax accusing OnePlus of unfair business practices and OnePlus working on an independent Android build of its own.

Neither Cyanogen nor Microsoft would comment on the report. ®

Sponsored: Magic quadrant for enterprise mobility management suites