Microsoft's Android Profits Soar
posted Saturday May 28, 2011 by Scott Ertz
You know how Microsoft has been making a big deal about Windows Phone 7, including their partnership with Nokia, but did you know that Microsoft also makes money on each Android phone sold? In fact, they make A LOT of money per handset sold.
Microsoft went on a lawsuit spree a while back, suing Android manufacturers ranging from Motorola to HTC, the most popular Android manufacturer. HTC settled their suit by agreeing to pay $5 per handset sold to Microsoft.
How much does that add up to? Hit the break to find out.
If you calculate based on the 30 million handsets they have shipped at $5 per handset, that works out to $150 million in revenue for Microsoft. Now, let's look at their Windows Phone revenue. They sell the licensing for WinPho7 for an average of $15 per device and they have sold a total of 2 million licenses. That adds up to $30 million. So, in mathematical conclusion, Microsoft has made 5 times more money on the sale of Google's free mobile operating system than they have on their own paid system.
Now, to be fair, Android has been on the market about 3 years longer than WinPho7 and HTC was the first manufacturer to make an Android device (T-mobile's G1). Also, Android is seeing a lot of sales success right now, being the top smartphone OS. With that data at hand, 5 times the revenue is actually really disappointing. I really would have expected that number to be a little higher.
The number is, of course, higher. We have only taken HTC into account. Microsoft has won or settled several of these lawsuits ranging from $7.50 to $12.50 per handset. Now, there is a lot of possibility for profit. Now, if only Microsoft could get some more WinPho7 handsets out into the world, maybe they wouldn't have to focus on monetizing Android.