Microsoft makes more money from Android than Windows PhoneAugust 6, 2012 0 Email article | Print article
Apple and Microsoft are both going after Android for violating patents. However, their end goals are completely different. While Apple looks to ban the competition from competing, Microsoft looks to create a revenue stream by forcing licensing deals. Microsoft’s strategy is, literally, paying off.
According to unofficial reports (Microsoft does not disclose the details of its licensing agreements with third-parties), HTC pays Microsoft US$10 per Android device sold whereas Samsung pays Microsoft US$12-13 per Android device sold. The royalties from these two companies alone is estimated to be US$792 million in Q2 2012; I’m sure Microsoft’s patent royalties from other Android manufacturers (and other non-Android related companies that Microsoft has signed with) boosts this number even higher.
Comparatively, Microsoft is estimated to subsidize Nokia Windows Phone handsets at the tune of US$250 million per quarter and in return Nokia pays Microsoft US$20 per handset sold. According to third-party counts, there were roughly 5 million Windows Phone shipped by all manufacturers in the last quarter and if we use the US$20 per handset Nokia pays Microsoft (which isn’t exactly accurate since the 5 million Windows Phone devices weren’t all Nokia devices, but bear with me while I try to prove a point), then a rough estimate of what Microsoft makes from Windows Phone is US$100 million per quarter. $792 million vs $100 million and withing having to pay the cost of subsidizing anything except lawyer bungalows. Clearly Microsoft’s investment into R&D (and strong-arm litigation tactics) is being paid off. Again, literally.