Microsoft receives $5 per HTC Android device, more income than Windows Phone

By Tom Warren, on 27th May 11 2:28 pm with 25 Comments

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.

  • Anonymous

    smart guys

    • http://www.winrumors.com Tom W

      Yup if Android is winning so is Microsoft to an extent.

    • http://twitter.com/TheRackow Andrew Rackow

      Just like how Microsoft bought 150 million in stock from apple way back when they were about dead. As Apple shares go up, Microsoft wins.

    • http://twitter.com/TheRackow Andrew Rackow

      Just like how Microsoft bought 150 million in stock from apple way back when they were about dead. As Apple shares go up, Microsoft wins.

    • Anonymous

      Except that Microsoft sold those stocks a long time ago.

    • Anonymous

      Except that Microsoft sold those stocks a long time ago.

    • http://twitter.com/TheRackow Andrew Rackow

      Just like how Microsoft bought 150 million in stock from apple way back when they were about dead. As Apple shares go up, Microsoft wins.

    • http://twitter.com/TheRackow Andrew Rackow

      Just like how Microsoft bought 150 million in stock from apple way back when they were about dead. As Apple shares go up, Microsoft wins.

  • Anonymous

    Doesn’t Google charge manufacturers to add Google apps to Android?

  • http://twitter.com/gibbyhome Mark Gibbs

    what about Samsung and Dell ? are they paying Microsoft or are they being sued ?
    its got to be one or the other…

    • Mark

      Samsung already has a broad cross licensing patent agreement with MS. Don’t know about Dell. It’s not a they’re either paying or they’re being sued deal. These discussion can and have taken years in some cases. Others have resulted in back and forth lawsuits which, if they go MS’s way, may end up settled by a licensing deal. And some, like Asus and Acer, are obviously touchy and MS may never sue but just keep pursuing a voluntary settlement. You’ve also got Apple suing Android indirectly through proxies and Oracle suing Google directly over it. The outcome of those will also affect the willingness of people like Asus and Acer to sign.

    • Mark

      Samsung already has a broad cross licensing patent agreement with MS. Don’t know about Dell. It’s not a they’re either paying or they’re being sued deal. These discussion can and have taken years in some cases. Others have resulted in back and forth lawsuits which, if they go MS’s way, may end up settled by a licensing deal. And some, like Asus and Acer, are obviously touchy and MS may never sue but just keep pursuing a voluntary settlement. You’ve also got Apple suing Android indirectly through proxies and Oracle suing Google directly over it. The outcome of those will also affect the willingness of people like Asus and Acer to sign.

  • http://twitter.com/gibbyhome Mark Gibbs

    what about Samsung and Dell ? are they paying Microsoft or are they being sued ?
    its got to be one or the other…

  • Joe05

    If Microsoft had no basis for it’s claims , they wouldn’t bother perusing this in court if necessary, they apparently have some sort of legal leverage.

    I would do the same thing .

  • Ub

    Tom,

    ” ASUS and Acer have avoided paying any license cost or royalty fees as Android is free.”

    I don’t understand this statement if it is already certain that andriod isn’t free, how is Asus and Acer not paying a license fee.

    • Mark

      Probably because they’ve simply refused to pay and MS doesn’t want to sue them. HTC signed because Apple was suin them and they needed MS’s patent protection.

    • GP007

      Don’t forget that Acer will make Windows Phones going forward, so paying for a WP license gives you patent protection as well, though how that transitions over to covering their android phones I dunno.

      I think in this case MS probably told them that as long as they make enough phones it’ll be ok.  Who knows really. 

  • http://twitter.com/s_a_r_k_i_s sarkis chamelian

    I think I’m going to get EVERYONE i know to buy a Andriod handset…..hahahaha

    • Guest

      Why so their privacy can be raped? Many people have no idea what Google does or that they do anything at all. On the surface, it doesn’t look bad, but put your critical thinking cap on, and it’s a goldmine of evilness.

    • http://twitter.com/s_a_r_k_i_s sarkis chamelian

      I love being evil ! haha

    • Guest

      Now that I have a little time, I can say I assume you were joking.

  • GP007

    I bet this has the diehard android fanboys up in arms and spitting flames.    Oh well, “free” is relative, and android was never really free even without the IP patent problems, from the moment the OEMs have to shoulder all the support and extra coding that MS does for it’s licensing fee then android stopped being “free”.

    I don’t get how some people can’t wrap their heads around this idea.

    • Guest

      If you want to use Android name or Google’s apps OEMs pay Google for software like Maps, users pay with their privacy. They have to market themselves as well. Android has never been free, and never will be, same as Facebook.

      One of the benefits of openess is possible privacy, without that, you can’t actually call it “open”. RMS doesn’t fight for nothing, Google just dilutes open source into a business decision to make it as pervasive as possible.

  • Test1ngi23

    I just love Microsoft! World leaders of innovation in the fields of making money without making something, and being a dick!

  • Guest

    Asymco isn’t a real firm, it’s an Apple fanboy (you should edit the post, considering it’s been mentioned before) who gives deliberate misinformation to make competitors look worse. He didn’t even realise that Android wasn’t free. Makes sense because Apple fans mostly don’t understand open source, licensing/legal issues, community dynamics.

    Obviously WM is different from WP7+ but that didn’t stop him from trolling MS & Nokia. Nokia will survive more easily than Motorola did with Android.