MSFT Samsung Deal Could Mean $0.09/Sh Upside, Says Morgan Stanley

Morgan Stanley’s Adam Holt this afternoon writes that a new licensing agreement announced this morning between Microsoft (MSFT) and Samsung Electronics means that Microsoft will collect royalties on 60% to 70% of all smartphones running Google’s (GOOG) “Android” operating system.

In the announcement this morning, Microsoft said it will “receive royalties for Samsung’s mobile phones and tablets running the Android mobile platform,” and that the two companies will work on devices running Microsoft’s Windows Phone 7.

Microsoft stands to collect $3 to $10 per Android phone from Samsung, writes Holt. Assuming Samsung gets 30% to 40% of the 241 million Android phones that may ship next year, that could add up to $200 million to $950 million, or 2 cents to 9 cents extra in EPS annually for Microsoft, he thinks. It’s possible that having to pay Microsoft could induce some OEMs to work more with Microsoft on Windows devices, he writes.

He also thinks the deal proves Google’s announced purchase of Motorola Mobility (MMI) has not dented Microsoft’s ability to collect royalties.

Holt maintains an Overweight rating on Microsoft shares.