The deal is to cross-licence Samsung and Microsoft's patent portfolios, so the two companies can share the patents they own. The subtext to the agreement is that when the two companies have agreed to share patents, neither company will sue for patent infringement, and both companies are better protected from attacks from other companies.
Samsung has also agreed to develop and promote Microsoft's Windows Phone operating system.
Microsoft already has similar deals in place with other manufacturers, including HTC. In fact, we've heard it suggested that Microsoft makes more money from Android sales than it does from its own Windows Phone platform.
The move makes it look as if Samsung is falling out of love with Android, or at least that it thinks Android has patent problems that can only be resolved with royalty agreements. It also gives the impression that Samsung doesn't have much faith in Google's ability to protect Android, which was the express purpose behind Google buying Motorola.
Google understandably doesn't like to see one of its biggest Android partners getting closer to Microsoft, and the fact that HTC and Samsung have to pay Microsoft for each Android device means Android is effectively no longer free for companies to use.
Google has responded to the deal with pure vitriol, telling TechCrunch, "This is the same tactic we've seen time and again from Microsoft.
"Failing to succeed in the smart phone market, they are resorting to legal measures to extort profit from others' achievements and hinder the pace of innovation. We remain focused on building new technology and supporting Android partners."
Microsoft has responded to Google's claim of extortion, with the lead corporate communications bod Frank Shaw tweeting, "Let me boil down the Google statement... from 48 words to 1: Waaaah."
Meow! Shaw then posted a link to a blog post Microsoft penned on the subject, which reads, "We recognise that some businesses and commentators -- Google chief among them -- have complained about the potential impact of patents on Android and software innovation.
"To them, we say this: look at today's announcement. If industry leaders such as Samsung and HTC can enter into these agreements, doesn't this provide a clear path forward?"
We're automatically mistrustful of anyone who uses the phrase "clear path forward", but we want to know your thoughts -- who's in the right here? Let us know in the comments section below, or on our Facebook wall.