HTC pays Microsoft $5 per Android device, according to reports.
Microsoft receives the money as part of a patent settlement between the two companies. Microsoft and HTC signed a patent agreement last year relating to HTC’s mobile phones running Android. Although the terms of the deal were undisclosed, Business Insider reports that the software giant receives $5 per device. Citi analyst Walter Pritchard claims that Microsoft is suing other Android manufacturers, attempting to squeeze between $7.50 and $12.50 per device out of them.
Microsoft CEO Steve Ballmer has previously said that Android is not free. “Android has a patent fee. It’s not like Android’s free,” he said in October last year. Microsoft has been pursuing Taiwan-based handset makers Acer and Asustek. The company is trying to muscle the vendors into agreeing a patent deal in an attempt to thawrt the spread of Android and Chrome OS. Both ASUS and Acer have been using Android on a number of devices.
Microsoft filed a lawsuit against Motorola in October, claiming their Android handsets infringed nine Microsoft patents. ASUS and Acer have avoided paying any license cost or royalty fees as Android is free. Other handset makers have had to pay royalty fees of at least $10-15 per device to officially use the patents concerned.
New market analysis from Asymco estimates that Microsoft generates more income from Android than Windows Phone. “If HTC paid $5 per unit to Microsoft, that adds up to $150 million Android revenues for Microsoft,” said Asymco’s Horace Dediu. The figures are based on HTC shipping 30 million Android devices. Microsoft has shipped around 2 million Windows Phone devices with an estimated licence fee of $15 per device. Asymco estimates that Microsoft has only generated $30 million to date from Windows Phone, five times less than Android. Asymco predicts that Microsoft may settle with other Android manufacturers. “The prospects of a windfall from Android dwarf the expected income from Windows Phone,” says Dediu.